Notice pursuant to Article 19 (3) of Chapter II of Protocol 4 to the Agreement between the EFTA States on the establishment of a Surveillance Authority and a Court of Justice concerning cases No COM 020 - 0081 FG, automatiske brannalarmanlegg, 0082 FG, automatiske innbruddsalarmanlegg, 0083 FG, bilalarm, 0084 FG, elektronisk låssystem, 0085 FG, gitter, 0086 FG, kombialarm, 0087 FG, merking/registrering/kjøretøyer/fritidsbåter, 0088 FG, sprinkleranlegg, 0089 FG, sykkellåser, 0090 FG, sikkerhetsskap, 0125 FG, gearstanglås (97/C 90/06)

A. The application and notification

1. On 11 July 1994 and on 25 September 1995, the EFTA Surveillance Authority received applications pursuant to Article 2 and notifications pursuant to Article 5 of Chapter II of Protocol 4 to the Agreement between the EFTA States on the establishment of a Surveillance Authority and a Court of Justice of 11 sets of rules on technical requirements relating to security devices and approval of companies installing such devices, from Norges Forsikringsforbund (the Association of Norwegian Insurance Companies, hereinafter referred to as 'NF`). These rules are handled by Forsikringsselskapenes Godkjennelsesnevnd (hereinafter referred to as 'FG`), a unit within NF.

2. The following rules were notified:

- Rules on automatic fire alarm devices,

- Rules on automatic burglary alarm devices,

- Norms governing the technical approval of car alarm devices,

- Temporary provisions on electronic locking systems used in relation to risks with the protection classification B1,

- Provisions of the insurance companies governing the testing and approval of anti-burglary grills,

- Rules on automatic alarm installations in dwellings (combined alarm devices) and requirements and trial specifications on automatic alarm installations in dwellings,

- Norms governing the marking and registration of motor vehicles and leisure boats,

- Rules for automatic sprinkler installations and letter of 14 May 1992 from FG as regards the FG-approval of undertakings installing and maintaining sprinkler devices,

- Norms for technically approved bicycle locks,

- Provisions of the insurance companies governing the testing and approval of safety cabinets and supplement to the provisions relating to locking devices,

- Requirements relating to gear lock in cars.

B. The parties and the market

3. NF, whose head office is in Oslo, Norway, is a professional body promoting the interests of its members. Norwegian life and non-life insurance companies registered in Norway, and foreign insurance companies which carry on insurance business in Norway through a branch, are eligible to become members of NF. The present list of members of NF comprises 46 insurance companies.

4. The members have a combined market share of virtually 100 % of the insurance products affected by the notified rules. Total gross premium income of the Norwegian non-life insurance companies amounted to Nkr 26 000 million in 1995. Nkr 24 000 million of the said amount relates to insurance contracts in respect of Norwegian risks.

5. FG's main task is to approve security devices and undertakings installing such devices. It also suggests, works out, revises, distributes and applies the notified sets of rules. As of today FG is managed as an ordinary division of NF. The daily work is carried out by a secretariat which consists of persons employed by NF. FG cooperates with other organizations which have the necessary technical qualifications in the specific fields to which the respective sets of rules are applied.

C. The notified rules

6. The stated aim of the rules is to prevent damage caused by fire, water, burglary and theft. The rules relate to so-called 'private fire- and comprehensive insurance`, 'commercial (including industrial) fire- and comprehensive insurance` and 'motor insurance`. In some instances, the insurance companies require security devices approved according to the rules, to be installed and in some instances the companies do not require the security devices to be installed, but may grant a rebate if such devices are installed.

7. The notified rules define the technical specifications and requirements of the security devices which must be fulfilled in order to obtain an approval. The rules on fire, burglary and alarm installations in dwellings also define the requirements and procedures for the approval of installation undertakings. The rules governing the marking and registration of motor vehicles and leisure boats define the procedures for approving undertakings that carry out the marking and registration of marked goods.

8. The main criteria for authorization of installation undertakings are sufficient experience and capacity to carry out the installation. The 'Norms governing the marking and registration of motor vehicles and leisure boats` also require a certain equity capital, alternatively a minimal annual turnover of Nkr 1 million. The aim of the last-mentioned requirement is to exclude companies who do not operate on a serious, stable and permanent basis. Only undertakings registered in Norway are entitled to obtain approval. The rules provide for classification based on the level of performance obtained. Only one level of performance is applied when deemed sufficient.

9. Approval of security devices and installation undertakings is granted by FG. However, FG may use external testing institutions to conduct the technical evaluations of the devices subject to the relevant set of rules. The rules do not contain any general provisions which allow FG to accept tests made or approval given, by a foreign certification body. As of today, evaluation of conformity does not impose on the applicant any expenses other than those incurred by evaluations performed by external organizations. The rules do not contain detailed provisions on the procedure relating to evaluation of approval.

10. According to information provided by NF, it is not stated in the rules that they are binding for the participating insurance companies, but there is an understanding between these companies implying that they shall not compete as regards requirements and specifications relating to security devices. However, according to NF this understanding between the insurance companies is limited to the abovementioned rules and does not imply cooperation with regards to the premiums.

D. Proposal for amendments

11. In light of, inter alia, the relevant provisions of the group exemption relating to the insurance sector and the general principles of non-discrimination laid down in the EEA Agreement, the Authority has, in discussions with the parties, indicated that the rules, as notified, would appear to infringe Article 53 (1) of the EEA Agreement and would not seem to fulfil the criteria for an exemption within the meaning of Article 53 (3). Following these discussions the parties have made certain amendments to the notified rules as well as proposed further changes. Furthermore, the parties have proposed changes to the structure and management of FG.

12. It will be explicitly stated on the front page of all the abovementioned sets of rules that they are illustrative and not binding. Furthermore, as an alternative to its own testing procedure, FG will accept approvals given by recognized certification bodies of other countries under standards which fulfil or are equivalent to the FG rules, provided that this can be duly verified. The provisions stating that only Norwegian suppliers are entitled to obtain approval will be deleted.

13. More detailed procedural provisions will be added to the rules. These provisions will, inter alia, state that the rules will be provided simply on request to any interested person, and that a request for assessment may be submitted at any time by any applicant. The installation undertakings that meet the assessment criteria are certified to this effect within a period of six months, except where technical considerations justify a reasonable additional period. The fact of compliance or approval is certified in writing, and the grounds for a refusal of approval are given in writing as well. The same applies to a refusal to take into account a request for assessment.

14. The notifying party has suggested to change the structure of FG so that FG will be managed by two boards of five members each, one board responsible for issues relating to fire prevention and one board responsible for issues relating to prevention of burglary. Representatives of insurance companies who are members of NF would be members of the said boards. Furthermore, in order to ensure the impartiality of FG in relation to the application of the rules, a committee would be established. This committee's main tasks would be to handle appeals of decisions made by FG, to ensure that the technical specifications are justifiable, and that the approval procedures are carried out in accordance with the rules and in a non-discriminatory manner. In such matters FG would follow the decisions of the said committee. The committee would consist of representatives of organizations concerned in the certification process, such as the police, fire brigade and various professional bodies whose members consist of companies supplying the security devices and installation services in question. As of today, 14 such organizations of which representatives would be eligible for membership have been identified. In addition, there would be two representatives of NF. One representative of each of the abovementioned FG boards would be eligible for membership of the committee also.

E. The intentions of the EFTA Surveillance Authority

15. On the basis of the foregoing facts, provided that the proposed amendments to the said rules are carried out, the EFTA Surveillance Authority intends to take a favourable view on the rules outlined above. Before doing so, however, it invites interested parties to send their comments within one month from the date of publication of this notice, quoting the reference according to the case numbers mentioned above, to:

EFTA Surveillance Authority,

Competition and State Aid Directorate,

Rue de Trèves/Trierstraat 74,

B-1040 Brussels.