Originally published in the Insurance Day, March 2010.
Insurance executives have been warned that they inadvertently face falling foul of EU competition laws by being present at meetings where 'commercially sensitive' information is exchanged between competitors.
According to Anthony Woolich, competition partner at law firm Holman Fenwick Willan, executives, and in particular those who have to deal with competitors in their roles within industry associations, will need to be increasingly aware of what issues were likely to come up in meetings beforehand when the European Commission's new antitrust block exemption rules for the insurance sector come into force on Thursday.
Even executives who did not participate in commercially sensitive discussions with competitors, but were present in the same room when they took place could constitute an infringement in competition laws, Woolich added.
He said: "Dealing with compliance issues for competition laws is a very important issue for the industry to focus on.
"Generally when you are dealing with competitors within industry associations it is very important to be aware of competition issues. Insurers should always review the agenda of any such meeting in advance if at all possible and insist on detailed minutes at the subsequent meeting. Then check that those minutes are accurate when you receive them."
Woolich advised that if an executive was in a meeting when commercially sensitive information arose then they should immediately make it clear that they did not wish to be part of such discussions and that the discussions should cease.
"If these issues do come up and you have expressed your objections the only thing to do is to make a noisy exit," he said. "Leave the room and make sure it is recorded in the minutes that you have left the room and then consult your legal department and tell them what has happened."
Woolich was speaking at a Holman Fenwick Willan briefing on the new BER, which exempts certain types of agreements in the insurance sector from the EU's general prohibition of practices restrictive of competition.
The new BER renews two of the four categories of agreements currently exempted, namely joint compilations, tables and studies and co-insurance and reinsurance pools with some amendments.
The European Commission has said that certain information exchange can be justified in order to allow insurers to accurately assess risks. It also added that pooling was important in order to ensure that all risks can be covered. These two types of agreements justify a block exemption. Other types of cooperation may also be legal but it will be for insurers to self-assess that they comply with general competition rules.
Woolich said that training of relevant people within companies on competition and compliance was an important thing for insurers to consider. "This can be done pretty easily but it needs the support of senior management and it needs to be monitored."
As well as being preventative such training could also be seen as being a mitigating factor if something did go wrong and a company found that it had infringed competition law, he concluded.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.