Insurance Activities and Competition: The Antitrust Exemption in the Insurance Sector (Actividad Aseguradora y Competencia: La Exención Antitrust del Sector Asegurador) (Spanish)
IE Law School
University of Bristol Law School
November 29, 2010
Cuadernos de la Fundación MAPFRE, 2011
Insurance companies and insurance activities are subject to profuse industry regulation, justified by potential market failures, but this does not exclude the applicability to them of Competition Law. Nevertheless, almost all legal systems worldwide foresee, one way or another, significant nuances in the application of the rules of competition in the insurance sector.
This work studies in depth the EU insurance block exemption for various types of agreements and practices in the insurance sector, which was revised by the European Commission in 2010. It also analyzes the particularities of the corresponding rules in Spanish Law, which necessarily have to follow the Community rules on the subject (necessarily overcoming any excesses that might result from the relevant Spanish insurance regulation).
An examination of the evolution of community-based exemption since 1992 highlights the progressive narrowing of the scope of the exemption, which currently is only provided for some information exchange agreements and for pooling of certain risks in specific conditions, subjecting the rest of the activities of insurers and reinsurers to the general rules applicable to any business.
This paper critically examines the survival of the block exemption as a policy instrument in EU Competition law. Obviously, our challenge is extended to the current block exemption in the insurance sector, for which we argue that its eventual repeal (as, on the other hand, the progressive thinning of the exemption highlights) should not significantly alter the substantive law applicable to the insurance business and could even do it more pro-companies as they would be relieved from meeting certain current formal requirements that limit the freedom of development of their businesses. As it happens in other sectors, functional and economic analysis of the practices of insurance companies can help filtering those that are justified by their efficiency and also benefit consumers from those that should outright be banned and never be covered by a sector-specific block exemption.
Note: Downloadable document is in Spanish.
Number of Pages in PDF File: 126
Keywords: Insurance, Regulation, Competition Law, Block Exemption Regulation
JEL Classification: G22, K21, L41
Date posted: November 30, 2010 ; Last revised: June 16, 2011