September 25, 2007 / 12:47 PM / 12 years ago

EU executive criticises business insurance practice

BRUSSELS, Sept 25 (Reuters) - Europe’s antitrust regulators have attacked two areas of business insurance as practised within the European Union, saying industry should either justify itself or reform, the European Commission said on Tuesday. A report adopted by the Commission cited long-standing and widespread industry practices in the reinsurance and coinsurance markets involving the alignment of premiums, which it said could lead to higher prices for large-risk commercial insurance.

The second area that raised questions inside the Commission, the EU’s executive arm, was “transparency of remuneration and conflicts of interest in insurance brokerage which may inflate prices and reduce choice”, it said in a statement.

On the EU’s “block exemption”, granted to the insurance industry in 2003 and expiring in 2010, the Commission said it had “yet to be persuaded that the regulation — which treats the insurance industry differently to other industry sectors — is still necessary”.

The Commission would review the matter definitively in a report in March 2009, the statement said.

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