Law firm wants combined response to European report

by Richard Kilner

Story link: Law firm wants combined response to European report

The City law firm Berwin Leighton Paisner has responded to a European Commission report (published on 25 September 2007) into business insurance by calling for a combined market response.

BLP’s David Harrison, Head of EU and Competition at the firm, believes the report means that long-standing practices within the marketplace must be looked at carefully and perhaps reconsidered.

Harrison would like to see the report’s concerns met by a combined response from the market, including the customers as well as businesses.

Such a response could address flaws identified by the Commission and suggest remedies, and justify aspects of the market that the report may consider negative but be seen in a different light by the British market.

Adrian Magnus, BLP competition partner, believes that the report has thrown down the gauntlet to the practices of the market and that relevant practices must either be altered or justified.

There are two most significant areas of concern in the London market identified by the report, and the first is the subscription procedure practised by the market for coinsurance and reinsurance which can lead to alignment of both premiums and conditions of cover for all underwriters. The report concludes that this may lessen competition in the marketplace, most especially regarding prices between insurers and reinsurers.

The second most important point highlighted by the report is the potential for conflict of interest of intermediaries regarding roles and remuneration, an absence of openness and transparency and the usage of contingent commissions.