David Strang says ending the BER may be the thin end of the regulation wedge.

For nearly 20 years, the EU’s Insurance Block Exemption Regulation (BER) has validated certain practices in the market which, because they involve agreements between competitors, otherwise might be considered to be anti-competitive.

On 24 March, the commission published a report in which it proposed that large parts of the BER should lapse next year. Much of the report is unlikely to affect the reinsurance market, but two topics demand close attention.

First, the commission wants to tighten the rules under which insurance and reinsurance pools operate. This significant proposal is linked to its wish to see more rigorous assessments as to whether particular pools comply with competition law.

This approach applies well beyond pools and the commission clearly intends to be more vigilant in future about the application of competition law in the sector.

The subscription market is specifically referred to here and it is not unreasonable to think that the report marks a decisive step towards securing a greater level of compliance with competition law. The pressure on the insurance sector to comply will increase; both insurers and reinsurers therefore should give it more priority.

David Strang is a partner and head of competition law at Barlow Lyde & Gilbert LLP.