WRITTEN QUESTION E-0354/00

by Armando Cossutta (GUE/NGL) and Lucio Manisco (GUE/NGL) to the Commission

(14 February 2000)

Subject: Rising cost of motor vehicle liability insurance

Since 1994, the year in which charges for compulsory motor vehicle liability insurance were deregulated, there has been an alarming increase in the premiums charged to motorists. This year insurance charges in Italy are set to rise by between 30 and 60 %, an increase which will applied by all the companies present

on the market. There is also evidence of a coordinated trend towards higher premiums, which suggests that some form of cartel is being operated by the insurance companies.

The head of the Italian antitrust authority, Giuseppe Tesauro, has expressed concern at the significant rise in insurance premiums combined with a reduction in the cover provided; furthermore, a legal investigation is under way into the possible existence of a cartel.

1. What action does the Commission intend to take to stop, and impose sanctions on, the cartel operated by the insurance companies in Italy?

2. Does the Commission agree that, as motor vehicle liability insurance is a statutory requirement, the Italian State should bring pressure to bear on the insurance companies to ensure fair charges instead of the excessive premiums fixed by the cartel in question?

Answer given by Mr Bolkestein on behalf of the Commission

(27 March 2000)

1. The Commission notes the Honourable Members' concerns regarding a possible cartel between Italian insurance companies in respect of the premiums charged for motor vehicle liability insurance. It also notes that the Italian competition authority is currently carrying out an inquiry into the matter. It is important to remember that the Commission's competence extends only to examining and possibly penalising restrictions on competition when they substantially affect trade between Member States. Since it is uncertain whether such an effect exists in the case in point, and since the national authorities have opened an inquiry, it would be advisable to allow these authorities to complete their investigation into the matter, in the spirit of cooperation set out in the Commission Notice on cooperation between national competition authorities and the Commission(1).

2. The Honourable Members' attention is drawn to the fact that the Community rules in this area seek to enable insurance companies to offer services and set up branches in other Member States on the basis of a single authorisation granted by the Member State of origin. More particularly, the Third Insurance Directives, in particular the Third Non-life Insurance Directive, Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239/EEC and 88/357/EEC(2) (which is applicable to motor vehicle insurance), established the principle of freedom to set tariffs and ended preliminary or systematic checks on tariffs and on the contracts which insurance firms propose to market.

The Commission could not therefore intervene in the way suggested by the Honourable Members. Since the monitoring of insurance companies is a task for the national authorities alone, the Commission is not in a position to check the insurance premiums proposed by companies or to give an opinion on the level of such premiums. It is the task of the competent national institution to ensure that insurance premiums are sufficient to enable firms to meet their contractual commitments.

(1) OJ C 313, 15.10.1997.

(2) OJ L 228, 11.8.1992.