Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - Sector Inquiry under Article 17 of Regulation (EC) No 1/2003 on business insurance (Final Report) {SEC(2007) 1231}
Date: 2007-09-25
Institutions: European Commission
Subjects: co-insurance, competition law, economic analysis, insurance, insurance company, insurance contract, inter-company agreement, profitability, reinsurance, type of business

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 25.9.2007 
COM(2007) 556 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Sector Inquiry under Article 17 of Regulation (EC) No 1/2003 on business insurance 
(Final Report) 

{SEC(2007) 1231} 

EN 

   EN 

 
 
 
  
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Sector Inquiry under Article 17 of Regulation (EC) No 1/2003 on business insurance 
(Final Report) 

1. 

1. 

2. 

3. 

4. 

INTRODUCTION 

The  Commission  decided  on  13  June  2005  to  initiate  a  sector  inquiry  into  the 
provision of insurance products and services to businesses in the Community, based 
on Article 17 of Council Regulation (EC) No 1/2003. Taking into account indications 
that  competition  in  this  sector  within  the  common  market  may  be  restricted  or 
distorted, the sector inquiry aimed at further investigating the sector and the practices 
concerned with a view to ultimately identifying any concrete restrictive practices or 
distortions of competition that may fall within the scope of Articles 81 or 82 of the 
Treaty.  Business  insurance  includes,  inter  alia,  coverage  for  property  risks  and 
business 
interruption;  shipping;  motor  vehicles;  general,  professional  and 
environmental liability; personal accidents and credit risks. 

together  with  a  comprehensive  working  document  of 

This  document  is  the  final  report  of  the  business  insurance  sector  inquiry1,  and  is 
being  released 
the 
Commission's  services  containing  the  full  findings  (the  Working  Document).  The 
earlier  Interim  Report  and  the  Working  Document  contain  an  extensive  account  of 
how  insurance  markets  are  organized  in  the  EU,  including  a  good  deal  of  original 
research  by  the  Commission  conducted  during  the  inquiry.  A  public  hearing  to 
discuss the findings of the Interim Report was held on 9 February 2007. The report 
was  open  for  public  consultation  and  received  ample  attention  from  industry 
stakeholders.  All  non-confidential  submissions  have  been  published  on  the 
Commission's website. 

This Final Report and the Working Document focus on a number of key issues and 
concerns.  The  omission  of  any  issue  in  this  Report  does  not  imply  that  the 
Commission  has  a  priori  excluded  possible  concerns  in  other  areas  of  business 
insurance. 

Insurance  is  of  vital  importance  for  big  and  small  businesses  throughout  the 
European  Union.  The  ability  to  insure  given  risks  may  make  or  break  a  particular 
business  model.  Many  of  the  world's  most  important  and  iconic  industries,  from 
aviation and shipping to major real estate developments could  not function without 
insurance,  and  when  insurance  markets  lack  the  capacity  to  insure  risks  this  has  a 
knock-on effect on the whole economy. EU insurers collect € 375 billion in non-life 
premiums  every  year2.  European  insurers  and  reinsurers  are  also  very  active  in 
international markets, and they are major investors in capital markets. Accordingly, 

1 
2 

The Interim Report was published on 24 January 2007. 
Source: Swiss Re, Sigma 2/2005, p. 39 and 5/2006, p. 35; cf. Interim Report, p. 37. 

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5. 

the functioning of this industry in a pro-competitive way is not only crucial for the 
insurance industry as such, but for the economy as a whole. Through this report, the 
Commission's  intention  is  to  contribute  to  an  even  more  competitive,  dynamic  and 
profitable European insurance industry able to play its full role in the economy and 
fulfil its potential in the European Union of the 21st century. 

With the exception of large customers and risks, primary insurance markets tend to 
be  national  in  scope,  even  when  they  are  primarily  served  by  consolidated 
multinational  insurance  groups.  This  is  for  a  variety  of  reasons,  of  which  the  most 
important is probably the fact that insurance contracts are written under, and subject 
to, general national contract law as well as specific insurance law, and that liability 
issues  also  arise  under  national  law  which  may  substantially  vary  from  one 
jurisdiction to another. In addition, there is a need for some form of local presence, 
often  for  distribution  and  always  for  claims  settlement,  and  language  issues  may 
arise.  It  is  natural  thus  to  characterize  the  organization  of  the  market  as  multi-
domestic and to exclude, in many cases, the possibility of any competitive constraint 
from cross-border providers short of actual entry.  The  mode  of  entry  for  insurers 
seeking to enter new markets has, to date, usually been through acquisition of a local 
company  which  becomes  a  subsidiary  or  (in  a  few  cases)  a  branch  of  the  acquirer. 
National  markets  tend  as  a  consequence  to  be  quite  concentrated,  especially  in  the 
major categories of risk. 

2. 

MAIN  FINDINGS  OF  THE  SECTOR 
INSURANCE 

INQUIRY 

INTO  BUSINESS 

2.1. 

Financial aspects of the industry 

6. 

7. 

The  Commission  gathered  a  range  of  data  on  insurers’  financial  performance.  The 
preliminary results suggest that profitability in business insurance at the EU-25 level 
has  been  sustained  over  recent  years  in  the  majority  of  Member  States,  albeit  with 
significant variations3. It has been argued by the industry, however, that, due to the 
insurance business cycle, a longer term perspective would be needed to fully assess 
profitability.  Many  industry  participants  also  claimed  that  there  were  a  number  of 
other  methodological  weaknesses  in  the  Commission's  approach.  Some  of  these 
criticisms  were  valid,  and  the  Commission  has  revised  this  section  of  the  Working 
Document to take account of these remarks. However, the general picture painted by 
the Interim Report remains unchanged. 

Underwriting  profitability  varies  significantly  both  in  terms  of  business  lines  and 
Member States. Profit ratios vary by a factor of one to three across the EU-25 for the 
same  insurance  line  and  by  up  to  double  within  the  same  country  for  different 
insurance  lines4.  While  it  is  acknowledged  that  the  risk  covered  by  underwriting  is 
different in the different lines, and therefore the return on capital demanded may be 
also different, the magnitude of these discrepancies is striking. There are also wide 
variations in insurers’ income for specific product lines within the same country.  

3 
4 

Bulgaria and Romania were outside the scope of the inquiry. 
Interim Report, ch. VI; Working Document, ch. II. 

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8. 

9. 

Insurers'  profitability  varies  significantly  across  the  EU-25  according  to  whether 
customers  are  SMEs  or  large  corporations.  In  a  few  cases,  certain  Member  States 
seem to consistently display higher underwriting profitability in the SME segment. It 
has  been  suggested  that  this  might,  in  some  instances,  be  related  to  the  mode  of 
remuneration  of  intermediaries  by  insurers,  the  suggestion  being  that  when  brokers 
have  market  power,  insurers  may  bid  up  broker  commissions  in  order  to  capture 
business. However, this would need to be verified on a case-by-case basis.  

The  analysis  which  the  Commission  has  carried  out  is  probably  most  significant 
when it comes to underlining market fragmentation and the scope for savings from 
further  integration.  There  are  many  factors  which  fragment  insurance  markets  and 
defy  any  simplistic  analysis.  The  Commission  may  wish  to  look  further  at  these 
factors and propose additional measures to encourage greater market efficiency at the 
pan-EU level.  

10. 

The  Commission  also  collected  information  relating  to  the  profitability  of 
reinsurance  companies  but,  for  methodological  reasons,  is  not  yet  in  a  position  to 
report  on  this  aspect  of  the  inquiry.  It  intends  to  do  so  via  an  addendum  to  the 
Working Document. 

2.2. 

Harmonization of terms and conditions in coinsurance and reinsurance 

11. 

12. 

13. 

14. 

Both co-reinsurance and coinsurance are important mechanisms underpinning the EU 
insurance  industry  and  the  insurability  of  large  risks.  The  existence  of  mechanisms 
allowing multiple (re)insurers each to take a part of a given risk plausibly allows for 
greater capacity and risk diversification and results in lower prices and better terms 
for  clients.  However,  whilst  acknowledging  these  benefits,  the  Commission  has 
found evidence which suggests that some practices prevalent in parts of the market 
might fall within the scope of Article 81 of the Treaty.  

In the Interim Report, the Commission drew attention to a practice in the market for 
joint  reinsurance  of  including  a  clause  intended  to  guarantee  that  a  given  reinsurer 
obtained  terms  no  less  favourable  (from  its  standpoint)  than  those  offered  to  any 
other reinsurer participating in the contract: the so-called "Best terms and conditions" 
clause (BTC). The Commission also noticed that this practice appeared to surface in 
a similar form in the coinsurance market.  

The Commission expressed the view in the Interim Report that the practice of BTC 
was likely to be to the detriment of the respective customers and might, under certain 
conditions, amount to a restriction of competition within the sense of Article 81(1) of 
the  EC  Treaty.  The  Commission  did  not,  at  that  time,  advance  a  view  as  to  the 
possible  exemptability  of  the  clause  under  Article  81(3).  It  undertook,  however,  in 
the  second  phase  of  the  inquiry,  to  take  a  closer  look  at  this  type  of  practice  and 
solicited views from the market on it.  

It appeared during the first phase of the inquiry that BTC clauses did not necessarily 
appear  as  such  in  the  final  (re)insurance  contract  but  could,  for  example,  be 
introduced at quote stage and thereby relate exclusively to the process whereby co-
(re)insurance  arrangements  were  negotiated  and  drawn  up.  As  a  result  of  its 
investigation,  it  soon  became  clear  to  the  Commission,  however,  that  widespread 
practice  in  both  reinsurance  and  coinsurance  markets  almost  always  results  in  a  de 

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15. 

16. 

17. 

facto alignment of premiums and other conditions of coverage independently of the 
use or otherwise of BTC clauses. Accordingly, the Commission widened its analysis 
to include all mechanisms which lead to such an alignment, whilst recognizing that 
the BTC clause may result in even less favourable terms for clients than when it is 
not employed. 

The  Commission's  provisional  view  of  the  practices  described  is  that  individual 
instances of them, when they result from agreements between undertakings, may fall 
within  the  scope  of  Article  81(1).  Furthermore,  the  Commission  has  not  been 
provided  at  this  stage  with  persuasive  arguments  to  justify  their  indispensability  as 
required  by  Article  81(3).  Obviously,  assessing  the  fulfilment  of  the  conditions  of 
Article  81(3)  will  have  to  be  done  on  a case-by-case  basis  and  against  the  relevant 
factual and legal context. The practices of revealing the price of the lead insurer in 
the subscription phase, guaranteeing the lead insurer's share and aligning the terms of 
cover other than the premium are less likely to raise concerns from a competition law 
standpoint or are more likely to fulfil the conditions for exemption.  

The Commission is aware that these practices have been considered normal market 
practice  in  certain  markets  for  a  considerable  time.  The  Commission  nonetheless 
believes  that,  in  the  light  of  its  findings,  the  industry  should  engage  in  a  critical 
reappraisal  of  the  said  practices.  It  intends  to  play  a  full  role  in  this  process  whilst 
duly observing the principle that it is to market participants themselves to assess the 
legality of their market practices under the applicable legal standards. 

The  Commission  stresses  that  its  observations  relate  only  to  elements  of  certain 
business  practices  which  arise  in  the  two-step  subscription  procedure  and  which  it 
believes  not  to  be  essential  to  the  operation  of  that  procedure,  and  still  less  of  the 
market  as  a  whole.  It  also  invites  the  customers  of  business  insurance  and 
reinsurance  which  is  typically  awarded  on  a  subscription  basis  to  be  aware  of  the 
possibility  of  awarding  such  business  on  terms  which  do  not  imply  harmonized 
premiums  and  to  ensure  that  wherever  this  is  appropriate,  this  option  is  fully 
explored by risk managers and brokers. The Commission is not raising any concerns 
in  the  Report  about  other  ways  of  awarding  co-  and  reinsurance  business,  which 
include  vertical  marketing,  ad  hoc  syndication  between  insurers  and  standing 
arrangements  such  as  pools.  Whether  in  individual  instances  the  use  of  these 
procedures  might  give  rise  to  competition  concerns  would  require  a  case-by-case 
analysis. 

2.3. 

Distribution of business insurance 

18. 

The Interim Report provided a detailed overview of the main aspects relating to the 
distribution  of  business  insurance  products  and  services  in  the  European  Union. 
Insurance  is  distributed  through  independent  brokers,  tied  agents,  banks  (so-called 
bancassurance)  and  direct  sales,  including  internet  sales.  Brokers,  tied  agents  and 
direct  sales  account  for  the  vast  majority  of  sales.  The  need  to  build  a  distribution 
network may be a barrier to entry in the absence of a strong independent brokerage 
network available at national level.  

19. 

Brokers  act  both  as  an  advisor  to  their  clients  and  as  a  distribution  channel  for  the 
insurer,  often  with  underwriting  powers and  binding authorities. This dual role is a 
potential  source  of  conflict  of  interest  between  the  objectivity  of  the  advice  they 

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20. 

21. 

22. 

23. 

24. 

25. 

provide  to  their  clients  and  their  own  commercial  considerations.  Such  conflicts  of 
interest  can  also  arise  from  a  number  of  sources  linked  to  their  remuneration, 
including contingent commissions.  

In respect of insurance intermediaries, the market surveys and the public consultation 
highlight the fact that current market practices - in particular the lack of spontaneous 
disclosure  of  remuneration  received  from  insurers  and  other  possible  conflicts  of 
interest - create an environment in which business insurance clients, in many cases, 
are unable to make fully informed choices. 

Practices aimed at inciting brokers to place business with particular insurers have the 
potential  to  undermine  fair  competition  in  the  insurance  market  around  terms  and 
conditions  of  cover,  service  and  insurers'  financial  strength.  Such  practices  might, 
instead, result in insurers' competing against each other on the level of remuneration 
afforded to brokers in an attempt to "buy" distribution, or at the very least influence 
the broker's choice.  

Disclosure  of  relevant  information  by  intermediaries,  in  relation  to  remuneration 
received from insurers and services provided to insurers, may help mitigate conflicts 
of interest. At present, even where disclosure takes place, it does not always appear 
to  be  complete,  clear  and  understandable  to  the  client.  In  the  light  of  similar 
situations that arise in other financial sectors, notably in securities and banking, it is 
questionable,  however,  if  disclosure  alone  is  sufficient  to  mitigate  conflicts  of 
interest, in particular in relation to those types of remuneration that specifically aim 
at aligning the interest of brokers with that of insurers. 

The  Interim  Report  also  explained  that  the  prohibition  by  insurers  of  commission 
rebating  could  amount  to  resale  price  maintenance  and,  as  such,  would  not  benefit 
from  the  block  exemption  granted  by  the Regulation  on  vertical  agreements  and 
concerted  practices.  Horizontal  agreements  or  concerted  practices  of  intermediaries 
or  decisions  of  their  industry  associations  not  to  rebate  commissions  to  clients  are 
likely to constitute restrictions of competition in the sense of Article 81 of the Treaty.  

Market surveys conducted in three Member States and the public consultation have 
not produced evidence as to the existence of private agreements or practices acting to 
prevent  or  discourage 
rebating 
commissions  to  their  clients.  However,  responses  submitted  by  Italian  brokers 
indicate  certain  confusion  as  to  the  broker  association's  policy  in  relation  to 
commission  rebating  and  suggest  a  need  for  further  clarification.  In  Germany,  this 
practice continues to be prohibited by national law. 

intermediaries 

independent 

insurance 

from 

At  present,  the  competitive  market  dynamics  in  relation  to  the  price  of  mediation 
services appear limited, at best, as far as SME clients are concerned. The seemingly 
low  concern  of  SME  clients  with  the  price  of  insurance  mediation  services  may 
perhaps  be  due  to  a  common  misconception  as  to  the  amount  of  commission  (and 
possibly  other  types  of  remuneration)  actually  paid  to  the  intermediary  included  in 
their insurance premium, which is typically higher than is realized. 

26. 

The  Commission  believes  that  this  issue,  although  potentially  leading  to  serious 
concerns  of  market  distortion,  has  multiple  dimensions  which  require  careful 
consideration. It intends to look at the issue in the framework of the planned review 

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of  the  Insurance  Mediation  Directive,  without,  however,  at  this  stage  prejudging 
whether  this  is  the  most  appropriate  way  to  address  it.  When  assessing  the  most 
appropriate  answer  to  this  issue,  the  Commission  will  also  take  into  account  the 
treatment given to similar situations in other sectors, in particular the MiFID regime 
for investment services, in order to ensure regulatory neutrality. 

2.4. 

Horizontal cooperation amongst insurers 

27. 

28. 

29. 

30. 

Some  forms  of  cooperation  between  insurers  are  at  present  block  exempted  by 
Regulation (EC) No 358/20035. The current Block Exemption Regulation (BER) was 
adopted  with  a  validity  of  seven  years  and  will  thus  expire  on 31 March 2010.  The 
sector inquiry noted that actual use of the BER varies significantly from one Member 
State to another, and sought to establish views on the future of this regime insofar as 
it applies to business insurance. 

In  their  responses,  industry  stakeholders  usually  observed  that  the  forms  of 
cooperation and agreements exempted by the Block Exemption Regulation are pro-
competitive.  Several  respondents  suggested  that  the  absence  of  market-wide 
historical  risk  information  or  the  unavailability  of  standard  conditions  (with  an 
associated case law interpreting their scope) were barriers to entry in certain markets. 
During the consultation, few respondents raised concerns with respect to the forms of 
cooperation covered by the BER, with the exception of some comments relating to 
the operation of downstream markets such as for security devices. 

The vast majority of respondents, at least from the insurance community, were very 
much  in  favour  of  prolonging  the  current  Block  Exemption  Regulation  when  it 
expires  in  2010.  Several  respondents  argued  that  the  Commission  should,  in  any 
case, not draw any firm conclusions as regards the future of the BER from the results 
of the Sector Inquiry, given that the latter only covered business insurance whereas 
the BER is wider in scope. Some respondents disputed, however, that the insurance 
industry needs a special treatment under antitrust rules. 

The  Commission  recognizes  the  attachment  of  many  in  the  industry,  especially 
insurers,  to  the  BER.  However,  almost  all  replies  failed  to  make  a  distinction 
between  the  desirability  of  the  forms  of  cooperation  covered  by  the  BER,  and  the 
desirability  of  the  BER  itself.  In  this  context,  it  is  necessary  to  recall  that  the 
objective of the BER before the entry into force in May 2004 of Regulation (EC) No 
1/2003, was to exclude certain generic types of agreement from the ambit of Article 
81(1),  thereby  obviating  the  need  for  separate  and  time-consuming  individual 
exemptions. Since  that  time, there is no longer any requirement on undertakings to 
notify forms of cooperation to  the Commission  which  may  fall  within  the  scope  of 
Article  81(1)  in  order  to  obtain  a  decision  exempting  those  forms  of  cooperation 
under Article 81(3). Rather, undertakings should themselves assess the compatibility 
of their behaviour with the competition rules, aided as necessary by external counsel 
and other advisors. 

5 

Commission Regulation (EC) No 358/2003 of 27 February 2003 on the application of Article 81(3) of 
the Treaty to certain categories of agreements, decisions and concerted practices in the insurance sector 
(OJ L 53, 28.2.2003, p. 8). 

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31. 

32. 

33. 

It may be argued that, in the light of Regulation (EC) No 1/2003 and on the basis of 
the  experience  accumulated  in  relation  to  the  different  forms  of  cooperation 
permitted under the BER, at least as far as business insurance is concerned, market 
participants  no  longer  need  a  form-based  sectoral  block  exemption  and  should  be 
able  to  conduct  their  own  self-assessment  of  the  application  of  Article  81(3)  as  in 
other  sectors.  On  the  other  hand,  there  is  a  risk  that  the  BER  on  occasion 
inadvertently exempts certain forms of cooperation which may have anticompetitive 
effects, particularly in the related markets for security devices. 

The  Commission  itself  would  point  out  that,  even  absent  the  insurance  BER,  the 
insurance  industry  would  continue  to  benefit  from  the  terms  of  the  horizontal  and 
vertical Block Exemption Regulations6. 

This  discussion  will  continue,  since  under  the  terms  of  the  enabling  legislation  the 
Commission  is  required  to  submit,  by  31  March  2009,  a  report  on  the  functioning 
and  future  of  the  BER7.  Industry  participants  and  other  interested  stakeholders  are 
therefore very much encouraged to continue their reflection in the interim, focusing 
on the role of the BER in the legal order rather than the specific forms of cooperation 
which it covers. 

2.5. 

Duration of business insurance contracts  

34. 

During the Sector Inquiry, the Commission looked at the duration of contracts and at 
clauses concerning their renewal and extension, because of the competition concerns 
that  a  general  practice  of  excessively  long-term  contracts  might  potentially  raise  in 
terms of foreclosing the market to new entry8. If customers are committed with the 
same insurer for a long period, this could affect competitors who are trying to gain 
access to the market or to increase their market share. This might happen when long-
term  agreements  combine  with  other  factors  to  have  a  cumulative  effect  on 
competition, such as the number of similar contracts, their duration, the share of the 
market  that  this  type  of  agreements  covers,  the  degree  of  market  saturation  and 
customer loyalty. Such concerns were also raised during the Sector Inquiry by some 
market participants, in particular in relation to Austria and Italy. 

35. 

In order to avoid misunderstanding, the Commission would like to emphasize that, in 
principle, it is concerned with the potential exclusionary effect of long term contracts 

6 

7 

8 

Council  Regulation  (EEC)  No  2821/71  on  application  of  Article  85(3)  [now  81(3)]  of  the  Treaty  to 
categories of agreements, decisions and concerted practices (OJ L 285, 29.12.1971, p. 46); Commission 
Notice  - Guidelines  on  the  applicability  of Article  81  to horizontal  co-operation  agreements  (OJ  C 3, 
6.1.2001,  p.  2);  Council  Regulation  (EC)  No  1215/1999  of  10  June  1999  amending  Regulation  No 
19/65/EEC  on  the  application  of  Article  81(3)  of  the  Treaty  to  certain  categories  of  agreements  and 
concerted  practices  (OJ  L  148,  15.6.1999,  p.  1);  Commission  Regulation  (EC)  No  2790/1999  of  22 
December  1999  on  the  application  of  Article  81(3) of  the  Treaty  to  categories  of  vertical  agreements 
and  concerted  practices  (OJ  L  336,  29.12.1999,  p.  21);  Commission  Notice  -  Guidelines  on  Vertical 
Restraints (OJ C 291, 13.10.2000, p. 1). 
Article 8 of Council Regulation (EEC) No 1534/91 of 31 May 1991 on the application of Article 85(3) 
of  the  Treaty  to  certain  categories  of  agreements,  decisions  and  concerted  practices  in  the  insurance 
sector 
In Austria the average duration of contracts was calculated as approximately eight years (101 months), 
in Slovenia almost seven years (81 months), in Italy approximately six years (73 months), and in the 
Netherlands, approximately six years (79 months). 

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36. 

3. 

37. 

38. 

39. 

40. 

41. 

under  competition  law  when  their  cumulative  effect  causes  market  foreclosure.  A 
concern might also arise if the practice were carried out by a dominant company with 
the object or effect of preventing or limiting competition. 

Whilst  the  Commission  is  able  to  intervene  under  competition  rules  in  certain 
circumstances,  this  is  not  always  the  preferred  route.  In  the  present  instance,  the 
Commission believes that it would be appropriate to consider the situation in Austria 
further, without prejudice to the route that this might take. In the case of Italy, recent 
regulatory intervention appears to have changed the environment such that long-term 
contracts should no longer be susceptible of generating foreclosure. 

CONCLUSIONS 

The sector inquiry identified three key issues that will need to be followed up by the 
Commission and/or national authorities: 

•  Certain practices leading to premium alignment when coinsurance and reinsurance 
is  purchased  through  a  two-step  procedure  involving  a  lead  and  following 
(re)insurers; 

•  Instances  where  a  pervasive  market  practice  of  long-term  contracts  may  lead  to 

cumulative foreclosure; and 

•  Indications of potential market failure in respect of insurance brokerage. 

The  Commission  invites  the  parties  concerned  by  the  various  issues  identified  to 
carry  out  their  own  assessment  and  to  engage  in  a  dialogue  with  a  view  either  to 
clarifying whether or not these practices are compatible with competition law, and/or 
to reviewing the practices in question.  

The  Commission  will  not  hesitate  to  make  use  of  its  enforcement  powers  under 
competition  law  if  necessary.  Clearly,  any  possible  enforcement  procedures  would 
require  a  full  examination  of  the  specifics  of  each  case  in  consultation  with  the 
national competition authorities. The Commission also invites market participants to 
come  forward  with  further  evidence  of  abusive  practices,  on  a  confidential  basis  if 
necessary. 

In  respect  of  insurance  brokerage,  the  Commission  intends  to  look  at  these  issues 
anew in the framework of the review of the Insurance Mediation Directive, but also 
invites Member States and industry participants to review the Commission's findings 
and propose appropriate action themselves. 

Finally,  in  respect  of  the  Block  Exemption  Regulation,  the  Sector  Inquiry  has  not 
produced  compelling  reasons,  as  regards  business  insurance,  to  prolong  it  beyond 
2010.  However,  the  Commission  will  review  this  matter  definitively  in  view  of  a 
report by March 2009 as the enabling legislation requires. 

42. 

The Commission welcomes further comments on the report, which should be sent to 
the email address: Comp-Sector-Insurance@ec.europa.eu. 

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