kroes: justify or reform

Details are a little sketchy at present, and I have not read the report itself yet, but it seems that EU Competition Commissioner, Neelie Kroes, has it in for the EU insurance industry on two main grounds:

First, the report refers to long-standing and widespread industry practices in the reinsurance and coinsurance markets involving the alignment of premiums, which it claims could lead to higher prices for larger-scale commercial risks.

Second, the report cites concerns over “transparency of remuneration and conflicts of interest in insurance brokerage which may inflate prices and reduce choice”.

Kroes invited the industry to reform its business practices to deal with these criticisms.

In the report also referred to the EU’s “block exemption”, which started in 2003 and is set to expire in 2010, the Commission said that it had “yet to be persuaded that the regulation — which treats the insurance industry differently to other industry sectors — is still necessary”. Apparently, a further review will be undertaken and a report published in about 18 months time, in March 2009.