Decree No. 202 / 2001 Coll.
Ordinance of the Office for the Protection of Competition for the Authorisation of a General Exemption from the Prohibition of Competition Agreements pursuant to § 3 (1) of Act No. 143 / 2001 Coll., on the Protection of Competition, for certain types of Insurance Agreements
Valid
Order
Effective from 01.07.2001
Text versions:
01.07.2001
20.06.2001
202
DECLARATION
The competition authority
of 5 June 2001
authorising a general exemption from the prohibition of agreements distorting competition pursuant to Article 3 (1) of Act No. 143 / 2001 Coll., on the Protection of Competition, for certain types of insurance agreements
According to Section 26 (1) of Act No. 143 / 2001 Coll., on the Protection of Competition, the Authority provides:
The prohibition under Article 3 (1) of Act No. 143 / 2001 Coll., on the Protection of Competition (hereinafter referred to as "the Act ') does not apply to agreements concluded between insurers, the content of which is the determination of common risk premium rates on the basis of collectively identified statistics or the number of harmful events, the establishment of standard insurance conditions, the joint insurance of certain types of insurance risks or the establishment of common rules for the testing and approval of security facilities, provided that the conditions laid down in this Decree are met.
(1) The prohibition provided for in Article 3 (1) of the Act does not apply to agreements containing:
(a) a method of calculating the average cost of covering the insurance risk or the compilation and reciprocal provision of mortality tables, tables expressing the frequency of diseases, accidents and invalidity arising from insurance involving a capitalisation element, where such tables are based on the collection of data for a certain number of years chosen as the examination period (hereinafter referred to as the "period chosen"), which relate to the same or comparable risks in sufficient numbers to form a basis suitable for statistical processing;
1. the number of claims in the selected period;
2. the number of individual insurance risks insured in each year of the selected period;
3. the total amounts paid or payable on claims arising from claims during the chosen period; or
4. the total amount of the insurance amount in each year of the selected period; or
(b) carrying out studies on the likely impact of the general external circumstances on the number and extent of claims or on the return on each type of investment and the mutual provision of their results.
(2) However, the prohibition provided for in Article 3 (1) of the Act does not apply to the agreements referred to in paragraph 1 only if:
(a) the calculations, tables and studies explicitly state that they are purely informative and do not identify individual insurers; and
(b) the calculations and tables do not contain, in any form, data on risk surpluses, yields arising from reserves, commercial and administrative costs involving commissions on intermediaries, taxes and charges or expected profits of participating insurers.
(3) However, the prohibition provided for in Article 3 (1) of the Act shall apply to agreements which prohibit the parties to the Agreement, their associations or other competitors from using calculations or tables different from those provided for in paragraph 1 (a), or prohibit them from deviating from the results of the studies referred to in paragraph 1 (b).
(1) Furthermore, the prohibition under Article 3 (1) of the Act does not apply to agreements which contain the creation of standard insurance conditions for direct insurance or which are intended to produce and provide each other with general models representing profits from an insurance activity involving an element of capitalisation, provided that these standard conditions for direct insurance are produced and provided with an explicit provision on their informative nature, the possibility to negotiate other conditions, and that they are made available to each person on request, and that the general models are considered only as recommending.
(2) However, the prohibition provided for in Article 3 (1) of the Act applies to agreements governing the standard conditions for direct insurance referred to in paragraph 1, provided that:
(a) exclude from insurance of damage normally related to a particular type of insurance without expressly stating that each insurer has the possibility to extend the insurance to such risks;
(b) make insurance claims subject to certain conditions, without it being expressly stated that each insurer has the possibility to refuse such conditions;
(c) introduce combined insurance covering risks to which the majority of insured persons are not simultaneously exposed, without expressly stating that such risks may be covered separately;
(d) indicate the insurance amount or participation of the policy holder;
(e) allow the insurer to maintain the insurance contract in the event of cancellation of part of the insurance protection, increase the premium without changing the risk or extent of the insurance, with the exception of the indexation clause, or otherwise change the policy conditions without the express consent of the policyholder;
(f) allow the insurer to change the duration of the insurance contract without the express consent of the policyholder;
(g) provide for insurance periods of more than three years for non-life insurance;
(h) provide for an automatic extension of insurance periods by more than one year in the event that the policy is not cancelled by the policy holder before its expiry;
(i) oblige the policy holder to renew an insurance contract which has ceased to exist because of the loss of the insured risk if the policy holder is re-exposed to a similar risk;
(j) oblige the policy holder to conclude an insurance contract for different types of insurance risk with one insurer;
(k) oblige the policy holder, in the event of the sale or other transfer of the insured item, to transfer the rights and obligations arising from the insurance contract to the acquirer of the insured item; or
(l) exclude certain categories of insurance against certain insurance risks; This is without prejudice to the specific insurance conditions of insurance contracts for certain social and occupational categories of insured persons.
(3) The prohibition provided for in Article 3 (1) of the Act also applies to the agreements referred to in paragraph 1, provided that:
(a) insurers or associations thereof agree or undertake not to use insurance conditions other than those covered by the agreement or to use models representing profits from insurance activities other than those referred to in paragraph 1; or
(b) the general models contain only certain interest rates or administrative cost data.
(1) Furthermore, the prohibition provided for in Article 3 (1) of the Act does not apply to agreements establishing groups consisting of competitors providing insurance, and to agreements establishing groups consisting of competitors providing insurance and reinsurance, both in order to cover together a type of insurance risk in the form of joint insurance and joint reinsurance, and to regulate their activities.
(2) The agreements referred to in paragraph 1 may determine the nature and characteristics of the insurance risk covered by the common insurance or reinsurance, the conditions for admission to the group, the shares of the group participant in the jointly insured or jointly secured risk, the conditions for withdrawal from the group and the rules of activity and management of the group.
(3) Agreements leading to the setting up of a reinsurance group and governing its activities may further determine for each participant the shares of the risks covered by them which will not be jointly secured and the price of the collateral covering both the operating costs of the reinsurance group and the compensation of each participant for their activities as a reinsurance undertaking.
(4) The prohibition provided for in Article 3 (1) of the Act shall not apply to agreements under paragraph 1 leading to the setting-up of insurance groups and governing their activities only if they do not contain undertakings which are liable to restrict competition other than the
(a) to take preventive measures, to apply general or specific insurance conditions agreed upon by the insurance group or by a commercial insurance policy established by the group, where such obligations give rise to entitlement to cover within the group;
(b) submit to the insurance group for approval of the claims for each jointly insured insurance event;
(c) to entrust the insurance group with the negotiation of reinsurance agreements on behalf of all insurers associated in that group; or
(d) not to provide an individual share of the jointly insured risk.
(5) The prohibition provided for in Article 3 (1) of the Act shall not apply to agreements under paragraph 1 leading to the setting-up of reinsurance groups and governing their activities only if they do not contain undertakings which are liable to restrict competition other than:
(a) to take precautionary measures, to apply general or special insurance conditions agreed upon by the reinsurance group or to be determined by the reinsurance group, and only by fulfilling those obligations shall the reinsurance cover be eligible for the group;
(b) to apply a common rate for risk insurance calculated by the group, taking into account the likely price of the risk cover, or, where there is insufficient experience available to establish such a tariff, insurance premiums approved by the reinsurance group, until the fulfilment of these obligations gives rise to entitlement to the hedge cover;
(c) submit to or forward to the hedging group for approval of the settlement of claims relating to the hedged risks and exceeding the defined amount;
(d) to participate in the costs of joint reinsurance by the amount determined by the hedging group, where the fulfilment of this obligation gives rise to entitlement to the hedge cover; or
(e) to entrust the reinsurance group with the negotiation of transfer agreements on behalf of all insurers associated with it.
(6) However, the prohibition provided for in Paragraph 3 (1) of the Act always applies to agreements referred to in paragraph 1 where:
(a) interested parties have a common market share in insurance group agreements above 10% or in reinsurance group agreements above 15%; This share shall be determined on the market for insurance products which are identical or interchangeable in terms of insured risk and performance; insurance products agreed by third parties on behalf of the interested parties shall be included in the participation of the interested parties; or
(b) the agreement does not allow the insurer to withdraw from the group within a period of less than six months without imposing a penalty.
(7) For insurance or reinsurance groups which insure or ensure the risks of natural accidents where insurance claims are rare but are large or increased risks which, by reason of their nature, are more likely to arise insurance claims and for which none of the parties to the Agreement is a member of another risk insurance group on the same market and, if they insure increased risks, insurance products carried out through the group do not represent more than 15% of all identical or interchangeable insurance products on the market agreed by or on behalf of the parties to the agreement, only insurance products carried out through the group and not the same or similar insurance products concluded by the parties or on their accounts not carried out through the group shall be taken into account to calculate the market share referred to in paragraph 6 (a).
(8) For the purposes of this Order
(a) insurance group means a group of individual insurers that agree to take out insurance of a type of insurance risk on behalf of and on behalf of all insurers associated with an insurance group, or may entrust the conclusion of an insurance contract and the management of insurance of a type of insurance risk on behalf of and on behalf of all insurers one person or a joint authority established for that purpose;
(b) reinsurance group means a group formed by individual insurers, where appropriate with the participation of one or more collateral-providing competitors, in order to ensure mutual or partial liability for its obligations for a particular type of insurance risk or to take reinsurance of the same type of insurance risks on behalf and on behalf of all insurers associated with a reinsurance group.
Furthermore, the prohibition under Article 3 (1) of the Act shall not apply to agreements which lay down rules for the establishment, recognition and mutual provision of technical specifications for safety equipment, conditions for the certification of safety equipment, the conformity of their installation and maintenance with technical specifications or relevant technical standards, or rules for the approval and evaluation of persons carrying out their installation and maintenance, provided that:
(a) the technical specifications and procedures for assessing compliance are accurate, technically justifiable and proportionate to the performance to be achieved by the use of the safety equipment concerned;
(b) the rules for the evaluation of persons performing installation and maintenance are objective, technical and non-discriminatory;
(c) the technical specifications and rules are produced and issued with an explicit declaration that insurers are able to choose other security equipment or persons performing installation and maintenance;
(d) the technical specifications and rules are provided on request to each person;
(e) the application for assessment of compliance with the relevant technical standards may be made at any time by any person and shall not unduly burden the assessment of compliance of the applicant;
(f) establishments and persons carrying out their installation and maintenance which meet the evaluation criteria shall be approved without discrimination within a period of no more than 6 months from the date on which the approval was requested, except where technical circumstances require a longer period for the assessment of the application;
(g) it shall be certified in writing that the equipment complies with the relevant technical standards and that the installation and maintenance personnel have been approved;
(h) the refusal to issue the certificate referred to in (g) shall be justified in writing, together with a copy of the results of the tests and checks carried out; and
(i) in writing, the refusal to approve or to carry out an assessment of compliance with the relevant technical standards shall be justified.
(1) The provisions of this Order shall also apply where the Parties impose obligations or lay down the rights of the associated persons in the agreements.
(2) For the purposes of this Decree, each Party to the Agreement shall include the associated persons. A common person means a person who:
(a) control and control the Party to the Agreement;
(b) controls the same person who controls the Party to the Agreement;
(c) are controlled by one or more of the persons referred to in (a) and (b) together.
(3) For the purposes of this decree, the audit shall mean the holding of a business or share in capital of more than 50%, or the right to appoint or revoke a majority of the members of the statutory body, supervisory board, directors of a legal person, or the possibility of otherwise exercising decisive influence over the management of a legal person.
By its decision, the Competition Authority may withdraw the advantages of the general exemption provided for in this Decree if, as a result of market developments, the effects of an agreement subject to a general exemption do not comply with the conditions for authorising an individual exemption under Article 8 of the Law. In particular, these may be cases where:
(a) the standard insurance conditions contain provisions other than those referred to in Article 3 (2) and give rise to a significant imbalance between contract rights and obligations to the detriment of the policy holder;
(b) in the case of group insurance or reinsurance, one or more participating insurers shall exercise a significant influence on the business policy of more than one group on the same relevant market, or those groups insuring or providing risks within the meaning of Article 4 (7) shall acquire a market share such that the policy holder has substantially reduced access to insurance of the same type of risk outside that group;
(c) insurers participating in group insurance or reinsurance should not have any significant difficulties, taking into account the nature, characteristics and extent of the risks covered, if they operate on the relevant market separately without setting up an insurance or reinsurance group;
(d) the setting-up or operation of an insurance or reinsurance group may result, as a result of the conditions for accession to the group, in the definition of insurance risks, transfer agreements or otherwise, in the distribution of the markets of the insurance or similar insurance products concerned; or
(e) the studies referred to in Article 2 (1) (b) are based on unjustifiable hypotheses.
This Decree shall take effect on 1 July 2001.
Chairman:
Ing. Bednář v. r.
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Regulation Information
| Citation | Decree of the Office for the Protection of Competition No 202 / 2001 Coll., authorising a general exemption from the prohibition of agreements distorting competition pursuant to § 3 (1) of Act No. 143 / 2001 Coll., on the Protection of Competition, for certain types of agreements in the field of insurance |
|---|---|
| Regulation Type | Order |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 20.06.2001 |
|---|---|
| Effective from | 01.07.2001 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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