COMMISSION OF THE EUROPEAN COMMUNITIES 
C0MC89) 641 final 
Brussels, 18 December 1989 
Proposal for a 
COUNCIL REGULATION (EEC) 
on the application of Article 85(3) of the Treaty to certain 
categories of agreements, decisions and concerted 
practices in the insurance sector 
(presented by the Commission) 
ëxp ) snatory^Vjgcio^andum 
Reasons for the adoption of a regulation 
In Its judgment of 27 January 1987 (German Fife insuranca, Csse 
45/85)C' the Court of Justice stated that the Insurance sector was 
fully subject to Articles 35 and 86 ana to Regulation No 17, thus 
clearly rejecting the view, which at times had been expressed in the 
past, that the prohibition of Article 85(1) was not applicable to the 
insurance sector until an implementing regulation based on Article 87 
paragraph 2(c) had been adopted. 
Pursuant to discussions between the Commission and the "Comité 
Européen des Assurances", most insurers and their associations decided 
to notify their agreements and recommendations. Approximately 300 
notifications have been received so far by the Commission; this number 
may be expected to increase In the near future. 
An examination of these notifications has shown that only a few of 
them remain outside the scope of application of Article 85(1), either 
because they are to be regarded as neutral with respect to competition 
law (for Instance certain codes of conduct for the prevention of 
certain forms of unfair competition) or because they are covered by 
the Commission's Notices of July 1968 concerning agreements, decisions 
and concerted practices In the field of cooperation between 
enterprises^2^ or of September 1986 concerning agreements of minor 
importance.<3) The other notifications concern agreements, decisions 
and concerted practices which faii within the scope of application of 
Article 35(1). They consist to a large extent of typical agreements or 
standardised terms of business used regularly and in large numbers by 
Insurance companies when concluding Insurance contracts with policy 
holders or as a basis for cooperation with other insurance companies. 
(1) (1987) ECR 405, 447. 
(2) 0J C 75, 297.1968, p. 3. 
(3) 0J C 231 , 12.9.1986, p. 2 
2. 
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In view of the quantity of notifications which poses serious problems 
regarding the Individual treatment of each case, the Commission 
envisages a general solution in the form of group exemption. The 
adoption of such group exemption would have the advantage of providing 
for a legal framework which would leave the Insurance companies 
concerned a sufficient degree of flexibility regarding the drafting of 
their contracts. Moreover, such exemption would give the parties the 
benefit of the highest possible degree of legal security, in the 
present case, the material prerequisites for the establishment of group 
exemptions are found to exist.' The notifications received by the 
Commission show the existence of a number of frequently occurring 
groups of agreements and concerted practices defined on the basis of 
abstract criteria, which are eligible for a general exemption from the 
prohibition of cartels. 
I I. Orientations with respect to the future contents of the envisaged group 
exempt Ion 
The Commission proposes to adopt a group exemption once it has, through 
the treatment of individual cases, gained sufficient experience to 
comprehensively assess the relevant restrictions of competition under 
Article 85(1) and (3). 
The Commission's practice has already led to a clarification of a 
number of Important questions, in Its decisions "Nuovo Cegam"(4> and 
"Fire Insurance",<5) the Commission clearly expressed its view that 
cooperation between Indemnity Insurers In which loss statistics are 
Jointly analysed and In which common risk premium tariffs based on 
common accident statistics, excluding any loading Instruments such as 
administrative costs, Intermediation costs and profits (pure premiums) 
are elaborated and applied, may be acceptable. However, such would In 
(4) OJ L 99, 11.4.1984, p. 29; 14th Report on Competition Policy 
(1984), point 76. 
(5) OJ L 35, 7.2.1985, p. 20; 14th Peport on Competition Policy 
(1984), point 75. 
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principle not be the cas** where the cooperation lad to the elaboration 
of commercial premium tariffs (I.e. the premiums actually charged to 
policy holders comprising the above-mentioned loading instruments).i6^ 
This position has been confirmed by the Court of Justice in the above-
mentioned "German Fire insurance" case.^ In Its decision "Protection 
and indemnity Ciubs"^8^ the Commission considered agreements on mutual 
insurance to be eligible for exemption under certain circumstances. 
Moreover, the Commission will soon adopt two further exemption 
decisions concerning respectively a reinsurance pooi^9^ and 
cooperation in the field of Jncustriai fire Insurance.(lQ) 
The Commission Intends to deal with additional Individual cases by way 
of formal decision, or administrative 'comfort' letter after 
publication of the main contents of the agreements. With a view to 
preparing this programme, the Commission has undertaken an examination 
and evaluation of the pending notifications which permits the following 
conclusions to be drawn regarding the contents of the future group 
exempt ion. 
It Is proposed that this cover types of agreements, decisions and 
concerted practices concerning: 
- the elaboration and application of common risk premium tariffs based 
purely on collectively ascertained statistics or loss experience 
and/or of standard policy conditions; 
- cooperation In the field of co-insurance and reinsurance. In 
particular in the forms of groups and pools; 
- cooperation In respect of claims settlement procedures; 
- cooperation in respect of testing and acceptance of security devices; 
- cooperation in respect of registers of and Information on aggravated 
risks. 
(6) See also Notice pursuant to Article 19(3) of Council Regulation No 
17/62, oj C 259, 12.10.1989, p. 3 "Concordato ItaMano Incendio". 
(7) See reference No 1. 
(8) OJ L 376, 31.12.1985, p. 2; 15th Report on Competition Policy 
(1985), point 69. 
(9) Notice pursuant to Article 19(3) of Council ^ulation No 17/62, OJ 
C 203, 8.8.1989, p. 2 "Teko"• 
(101» See reference No 6. 
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Basically, the conditions under which such agreements could be exempted 
are the fol lowing : 
- Common risk premium tariffs basea purely on collectively ascertained 
statistics or ioss experience may only be elaborated If they 
constitute common actuarial calculations based on joint ioss 
statistics with the aim to provide a technical balance on which the 
insurance industry can operate, to the exclusion of any loadings for 
instance for Intermedial les' commissions, administrative costs or 
profits. As the Court of Justice found in Its above-mentioned ruling, 
an exemption may in principle not be granted for commercial premium 
tariffs, i.e. tariffs that Include not only the cover of costs 
Incurred in relation to claims Insured, but also such supplementary 
loadings as described above. Such tariffs should furthermore only be 
exempted if they are established as non-binding recommendations, 
leaving the participants free to depart from them. 
- Standard policy conditions, although positive in the sense that they 
permit a comparison of the extent of coverage and prices, thus 
contributing towards transparency for consumers, should only be 
exempted If they are Issued as recommendations leaving the 
participating companies free to depart from the standard to meet 
Individual customers' needs. Furthermore, standard policy clauses 
should not unduly restrict competition, for example by uniform 
recommendation of a very long contractual duration without 
corresponding economic advantages, thus unduly preventing policy­
holders from seeking cover with competing companies, or by generally 
recommending standard conditions systematically excluding particular 
types of cover, (e.g. for natural catastrophes or nuclear accidents). 
This exemption cannot, and does not, affect Member States' right to 
enact and apply their own consumer protection legislation In this 
area, provided this remains within the limits set by Community law. 
Agreements, décrions al^c* ccrtfe,';1^ ;?i/ict Ices» by which inr^'cn-;:;; 
companies cooperate to set tip co-Insurance or reinsurance (or mixed 
fo-Insurance and reinsurance» arrangements, especially in the form of 
pools or groups, ,•.;*'• it positive consideration in particular whera 
they open the market for companies which otherwise cou id not eastiy 
enter it a'one, due to limited earacity cr expertise, or if they lead 
to a coverage of such risks the': «re not usually covered by 
individual companies.. Although such schemes may restrict competition 
between the participating companies In the reinsurance and/or in the 
direct insurance field, they cou id be exempted under the condition 
that effective competition on the market Is guaranteed. 
However, such agreements should not be exempted if there is a danger 
of monopolization of the market or if their rules would enable a 
participant to abuse its economic power. Additionally, they should 
not be construed In such a way as to make parties lose their autonomy 
completely and they should not entirely prevent parties from seeking 
reinsurance cover or participating In a co-Insurance arrangement 
elsewhere. 
Regarding arrangements on accelerated and simplified procedures for 
the settlement of claims, especially in the case of damages covered 
by several insurance contracts, such arrangements do not, as a rule, 
restrict competition. Nevertheless, they should not be applied in a 
way detrimental to the interests of policy-holders. 
Cooperation arrangements In the field of testing and acceptance of 
security devices have the advantage of facilitating underwriting by 
eliminating the need for individual examination in each particular 
case. They can be considered eligible for exemption if the approval 
systems themselves are open to all manufacturers or fitters, are 
based on purely objective and Qualitative criteria and do not 
dissuade persons from submitting to this system by way of 
disproportionate cost. Such arrangements are frequently accompanied 
by recommendations aimed to ensure that the granting or refusal of 
approval is reflected in some way in the participating companies' 
underwriting or rating po!ic»es. Recommençât lone, of this kind would 
oniy oe acceptable if they remain pure; nor-bindlng terms of 
?efe?fne"5. iea'-'i^g l'^c c-^moar-•*?£. tree to d-^nrt fron those ;?taf".dards... 
- cooperation between insurers with regard to registers of or 
information systems on aggravated risks can help to prevent fraud. 
Although in general not aimed at a restriction of competition, 
participation in such systems should not be obligatory and should not 
deprive companies of the possiblIIty to Insure such risks at their 
own evaluation. Further, they should not be operated to the detriment 
of the consumer. 
In the group exemption regulation, an 'opposition procedure' should be 
foreseen, so that companies may notify their arrangements in cases of 
doubt of legality of certain provisions with regard to the regulation. 
The benefit of this procedure should be accorded to provisions which 
have not been explicitly exempted but which nevertheless do not fall 
under the category of unacceptable or 'black' clauses. 
III. Procedural aspects 
Before the Commission may establish a group exemption, it Is 
necessary that the Council adopt an enabling regulation under Article 
87(2)(b) of the EEC Treaty, empowering the Commission to declare, 
pursuant to Article 85(3), that Article 85(1) does not apply to 
certain categories of agreements, decisions and concerted practices 
In the insurance sector. 
The proposal annexed hereto takes into account the orientation 
described above. The draft Council regulation Is conceived along the 
lines of Regulations No 19/65 and No 2821/71. 
? 
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Proposal for a 
CQUNCII RFfiHIATTON (FFP 
on the application of Article 85(3) of the Treaty to certain 
categories of agreements, decisions and concerted 
practices In the insurance sector 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic 
Community, and in particular Article 87 thereof, 
Having regard to the proposal from the Commission, 
Having regard to the Opinion of the European Parliament, 
Having regard to the Opinion of the Economic and Social Committee, 
1. Whereas Article 85(1) of the Treaty may, in accordance with Article 
85(3), be declared inapplicable to categories of agreements, 
decisions and concerted practices which fulfil the conditions 
contained in Article 85(3); 
2. Whereas the provisions for the implementation of Article 85(3) must 
be adopted by way of regulation pursuant to Article 87; 
3. Whereas cooperation between undertakings in the Insurance sector is, 
to a certain extent, desirable to ensure the proper functioning of 
this sector and may at the same time promote the Interest of 
consumers; 
4. Whereas exemptions under Article 85 (3) cannot themselves affect 
Community and national provisions promoting the Interests of 
consumers in this sector; 
5. Whereas agreements, decisions and concerted practices serving such 
aims may, insofar as they fall within the prohibition contained in 
Article 85(1), be exempted therefrom under certain conditions; 
whereas this applies particularly to agreements, decisions and 
concerted practices relating to common risk premium tariffs based 
purely on collectively ascertained statistics or loss experience, 
standard policy conditions,, common coverage of certain types of 
? 
risks, the settlement of claims, the testing and acceptance of 
security devices, and registers of and Information on aggravated 
rIsks; 
6. Whereas In view of the large number of notifications submitted in 
pursuance of Council Regulation No 17,(1) as last amended by the Act of 
Accession of Spain and Portugal, it Is desirable that In ordc to 
facilitate the task of the Commission it should be enabled to 
declare by way of regulation that the provisions of Article 85(1) do 
not apply to certain categories of agreements, decisions and 
concerted practices; 
7. Whereas It should be laid down under which conditions the 
Commission, in close and constant liaison with the competent 
authorities of the Member States, may exercise such powers; 
8. Whereas under Article 6 of Regulation No 17 the Commission may 
provide that a decision taken in accordance with Article 85(3) of 
the Treaty shall apply with retroactive effect; whereas It Is 
desirable that the Commission be empowered to issue regulations 
whose provisions are to the like effect; 
9. Whereas under Article 7 of Regulation No 17 agreements, decisions 
and concerted practices may, by decision of the Commission, be 
exempted from prohibition, In particular If they are modified In 
such manner that Article 85(3) applies to them; whereas It is 
desirable that the Commission be enabled to grant by regulation like 
exemption to such agreements, decisions and concerted practices if 
they are modified In such manner as to fall within a category 
defined in an exempting regulation; 
10. Whereas the possibility cannot be excluded that, in a specific 
case, the conditions set out in Article 85(3) may not be fulfil led; 
whereas the Commission must have power to regulate such a case in 
pursuance of Regulation No 17 by way of decision having effect for 
the future, 
HAS ADOPTED THIS REGULATION : 
(1) 0J No 13 of 21.2.1962, p. 204/62. 
Article 1 
1. Without prejudice to the application of Regulation No 17 the 
Commission may, by Regulation and In accordance with Article 85(3) 
of the Treaty, declare that Article 85(1) shall not apply to 
categories of agreements between undertakings, decisions of 
associations of undertakings and concerted practices In the 
insurance sector which have as their object cooperation with respect 
to : 
(a) common risk premium tariffs based purely on collectively 
ascertained statistics or loss experience; 
(b) common standard policy conditions; 
(c) the common coverage of certain types of risks; 
(d) the settlement of claims-, 
(e) the testing and acceptance of security devices; 
(f) registers of and information on aggravated risks. 
2. Such regulation shall define the categories of agreements, decisions 
and concerted practices to which It applies and shall specify in 
particular : 
(a) the restrictions or clauses which may, or may not, appear In the 
agreements, decisions and concerted practices; 
(b) the clauses which must be contained In the agreements, decisions 
and concerted practices or the other conditions which must be 
satIsfled. 
o 
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Article 2 
Any Regulation pursuant to Article 1 shall be made for a specified 
perlod. 
It may be repealed or amended where circumstances have changed with 
respect to any of the facts which were basic to Its being made; In 
such case, a period shall be fixed for modification of the 
agreements, decisions and concerted practices to which the earlier 
Régulât ion applles. 
Article 3 
A Regulation pursuant to Article 1 may provide that it shall apply with 
retroactive effect to agreements, decisions and concerted practices to 
which, at the date of entry Into force of that Regulation, a decision 
issued with retroactive effect In pursuance of Article 6 of Regulation 
No 17 would have applied. 
Article 4 
1. A Regulation pursuant to Article 1 may provide that the prohibition 
contained In Article 85(1) shall not apply, for such 
period as shall be fixed by that Regulation, to agreements, 
decisions and concerned practices already In existence on 13 March 
i 1962 which do not satisfy the conditions of Article 85(3), where' : 
-within six months from the entry into force of the Regulation, 
they are so modified as to satisfy the said conditions In 
accordance with the provisions of the Regulation; and 
- the modifications are brought to the notice of the Commission 
within the time limit fixed by the Regulation. 
$ 
J< 
— * ,„. 
The provisions of the first subparagraph shall apply In the same 
way to agreements, decisions and concerted practices existing at the 
date of accession of new Member States to which Article 85(1) 
applies by virtue of accession and which do not satisfy the 
conditions of Article 85(3). 
2. Paragraph 1 shall apply to agreements, decisions and concerted 
practices which had to be notified before 1 February 1963, in 
accordance with Article 5 of Regulation No 17, only where they have 
been so notified before that date. 
As regards agreements, decisions and concerted practices existing 
at the date of accession of new Member States to which Article 85(1) 
applies by virtue of accession and which had to be notified within 
six months from the date of accession in accordance with Articles 5 
and 25 of Regulation No 17, paragraph 1 shall not apply unless they 
have been so notified within this period. 
3. The benefit of the provisions laid down pursuant to paragraph 1 may 
not be claimed in actions pending at the date of entry into force of 
a regulation adopted pursuant to Article 1; neither may it be relied 
on as grounds for claims for damages against third parties. 
Article 5 
Before making a regulation, the Commission shall publish a draft 
thereof to enable all persons and organizations concerned to submit 
their comments within such time limit, being not less than one month, 
as the Commission shall fix. 
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Article 6 
1. The Commission shall consult the Advisory Committee on Restrictive 
Practices and Monopolies : 
(a) before publishing a draft regulation; 
(b) before adopting a regulation. 
2. Except where otherwise provided by this Regulation, paragraphs 5 and 
6 of Article 10 of Regulation No 17, relating to consultation with 
the Advisory Committee, shall apply; joint meetings with the 
Commission shall however take place not earlier than one month after 
dispatch of the notice convening them. 
Article 7 
Where the Commission, either on Its own Initiative or at the request of 
a Member State or of natural or legal persons claiming a legitimate 
Interest, finds that In any particular case agreements, decisions and 
concerted practices to which a regulation made pursuant to Article 1 of 
this Regulation applies have nevertheless certain effects which are 
Incompatible with the conditions laid down in Article 85(3), 
it may withdraw the benefit of application of that regulation 
and take a decision in accordance with Article 6 and 8 of Regulation No 
17, without any notification under 4(1) of Regulation No 17 being 
required. 
This Regulation shall be binding in its entirety and directly 
applicable in all Member States. 
Done at Brussels, For the Council 
/3 

ISSN 02^4-1475 
COM(89) 641 final 
DOCUMENTS 
EN 18 
Catalogue number : CB-CO-89-608-EN-C 
ISBN 92-77-56106-8 
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