WHICH CONSEQUENCES IN THE INSURANCE MARKET FOR THE END OF THE BLOCK EXEMPTION

Abstract

In 1992 the European Commission adopted an exempting regulation for the insurance market that was replaced in 2010 by the so called Insurance Block Exemption Regulation (IBER) that will expire on 31 March 2017. The exemption regards the application of competition rules to certain types of agreements in the insurance sector, joint compilations, tables and studies which involve the exchange of information between insurers; and also the common coverage of risk via co-(re)insurance pools. On 17 March, the European Commission released a report focusing on the future of the Insurance Block Exemption Regulation in which it is recommended to not renew IBER. This recommendation comes from the consideration that consumers were not receiving a fair share of the resulting benefits from the cooperation exempted by IBER and that is a Commission’s long-term strategy to eliminate industry-specific exemptions from competition law. This paper aims to investigate, under a law and economics approach, if other factors can be relevant in deciding to not provide any more exemptions for the insurance companies. After an introduction, in the following part, the economics effects of the exchange of information are analysed in terms of asymmetric information remedy and competition restrictions; then the story of the block exemption is presented and the next paragraph deals with the change in the insurance market after the end of the exemption; finally, some conclusive remarks are drawn in the light of the Big Data era.