EN Official Journal of the European Union CE 65/119

(2004/C 65 E/132)

WRITTEN QUESTION E-2222/03

by Bart Staes (Verts/ALE) to the Commission

(2 July 2003)

Subject: Europe-wide harmonisation of insurance against acts of terrorism

Since the terrorist attack in New York on 11 September 2001, it has become clear that terrorist acts may have unprecedented consequences. First and foremost, that affects the victims and their immediate surroundings, but a great deal of economic damage may be caused as well. The cost of compensation for the damage caused is borne principally by the insurance companies, and insurance claims for enormous amounts may be submitted.

Insurance companies in the Netherlands have decided to bear jointly the risk of terrorist activities because the impact thereof can be so great. To that end, the Netherlands Reinsurance Company for Losses from Terrorism (NHT) has been set up as an umbrella organisation for insurance companies to provide cover for the consequences of terrorism.

In the Netherlands, the total sum that may be paid out for 2003 is being limited to EUR 1 billion. According to the multilingual website www.terrorismeverzekerd.nl, that amount is a maximum total amount, and no compensation will be paid in excess thereof. The amount has been put together by insurance companies, reinsurance companies and the government. The insurance companies and reinsurance companies have jointly put in EUR 700 million, the government the remaining EUR 300 million. According to www.terrorismeverzekerd.nl, the government's contribution is being made in the form of government reinsurance of the insurance companies against payment of a premium.

The Belgian insurance sector is aware of this initiative. However, according to the 23 June 2003 edition of ‘De Morgen’, it takes the view that a European system of compensation for acts of terrorism would be the best solution, since it would forestall any overbidding between the Member States. On the other hand, it would be a mistake for Belgium to be left behind in splendid isolation.

Is the Commission aware of the Netherlands scheme for insurance against acts of terrorism? Does the Netherlands Government's contribution comply with European legislation on fair competition?

If so,

(1) is there a maximum amount that Member State governments may contribute to such agreements with private insurance companies;

(2) is it true that Member States may outbid each other for the benefit of their own insurance sector;

(3) is the Commission prepared to undertake Europe-wide harmonisation so as to ensure that (a) not only insurance companies but also insured persons are covered on the same terms throughout the European Union and (b) employees and investors in the insurance sector are properly protected against the unpredictable extent of the economic damage caused by terrorism?

Answer given by Mr Monti on behalf of the Commission

(19 September 2003)

In reaction to the events of 11 September 2001 several pools of insurers have been set up in Europe each of which concentrates on insuring risks which are located within a national territory. This could raise issues of antitrust law and if there is state backing, also state aid law.

As regards the antitrust aspects, to the knowledge of the Commission the Netherlands pool has been notified to the national Dutch competition authority. The German pool Extremus and the Austrian pool notified their agreements to the Commission where they are currently under investigation.

The Commission is in close contact with the national authorities to ensure a common approach with respect to the evaluation and treatment of such pools.

The Commission has also maintained close contacts with the national insurance authorities in order to assess, among others, the situation on the markets and the need to launch an initiative at Union level in the field of terrorist risks insurance. The very large majority of Member States have not considered it necessary. The Commission will, however, remain vigilant as to any evolution in this file.

There is no maximum amount that Member State Governments may contribute to such pools. As a rule, state backed pools cover only risks located within the national territory of the state backing the pool. Therefore, these pools do not compete with each other.

If such schemes are state backed, they could also give rise to State aid concerns. The Commission has examined under State aid rules a series of insurance schemes for terrorist acts in the aftermath of 11 September 2001, in particular for aviation in nearly all Member States. In its assessment, the Commission has paid attention to presence of market failure. The Commission has issued two Communications (1) on the repercussions of these terrorist attacks and has proposed a Regulation (2) in order to provide for minimum insurance requirements. The adoption of this proposal is still pending.

Outside the aviation sector, the Commission has not yet received any State aid notification for schemes of the type mentioned by the Honourable Member.

(1) COM(2001) 574 final COM(2002) 320 final.

(2) COM(2003) 454 final.