HUNGÁRIA INSURANCE CO LTD / 11 INSURANCE COMPANIES
Hungária Insurance Company and 11 other insurance companies made a co-insurance agreement in June 1997, called Hungarian Atom Pool. The parties applied to the Office of Economic Competition for a qualification that their agreement did not restrict competition, or else for an exemption from the prohibition according to the regulation on group exemption of agreements of insurance companies, or for an individual exemption regulated by the Competition Act.
The agreement covered the insurance for material damages of nuclear installations and third parties liability (TPL) losses relating to its associated operation, aiming at safeguarding the co-operation on insurance coverage of nuclear installations in Hungary as well as to regulate the co-operation on the reinsurance coverage relating to nuclear installations abroad.
The joint market share of the above mentioned insurance companies on the different segments of the market was almost complete (93-98 per cent). Considering the amount of the liability loss on the field of nuclear energy, Paks Nuclear Plant was the main installation for which TPL policy could be written only by pool.
The Competition Council - accepting the investigator`s report - pointed out the horizontal character of the agreement and the fact that group exemption regulation on insurance agreements could not be applied because the joint market share of the parties exceeded 40 per cent.
The Competition Council took into consideration the possibilities of individual exemption of the agreement and found that all the conditions of the relevant provision of the Competition Act were fulfilled: (i) the agreement contributes to a more reasonable organisation of liability loss insurance, (ii) it allows consumers a fair share of the resulting benefit as the insurance holder could take out a policy with such an insurance pool which is able to undertake insurance risk and hold co-reinsurance with other pool, (iii) the concomitant restriction of competition does not exceed the extent necessary to attain economically justified common goals, (iv) "the agreement does not create the possibility of excluding competition in respect of a substantial part of the products concerned" as entering the market by other insurance companies e. g. for property insurance was possible.
The Competition Council exempted the Hungarian Atom Pool from the prohibition on condition that the co-insurance must not be applied for every kind of insurance policy but exclusively for the material damages of nuclear installations and the associated liability losses.
December 15, 1997. Budapest
dr. Sólyom Eszter sk. előadó
dr. Bodócsi András sk.
Vérné dr. Labát Éva sk.