AS324 – REGULATION OF DIRECT PAYMENT OF CLAIMS FOR DAMAGES SUSTAINED IN ROAD ACCIDENTS
PRESS RELEASE
PRESS RELEASE
Third-Party Auto Insurance: Antitrust says decree on direct payment of claims must not undermine competition
Government told: consumers need better protection
The Italian Competition Authority, at its meeting on 1 February 2006, made a number of observations regarding the draft Presidential Decree dealing with the “Regulation Of Direct Payment Of Claims For Damages Sustained In Road Accidents Pursuant to Article 150 of the Code of Private Insurers”. In its opinion, which was forwarded to the Prime Minister and to the Minister of Industry, the Authority recommends a thorough rewording of the decree. Specifically, in order to guarantee that the compulsory procedure for direct payment of claims acts as a brake on premiums, there should be explicit rules banning any unnecessary coordination among insurance Companies regarding aspects which are important for competition and ensuring the autonomy of the individual Companies.
The spotlight was turned on the breadth of activities the draft decree would delegate to consortia of insurers, in stark contrast with the principles of competition. In the Authority’s view, there should be a prohibition on Companies defining or sharing technical or economic parameters relating to claims payments or identifying economic regulatory mechanisms in such a way that the Companies are insufficiently stimulated to restrain repair costs.
The Authority also draws the Government’s attention to a number of rules in the decree which would seem to limit consumer protection to the benefit of insurance Companies. Further study is required, in particular, as to the lack of regulation of cases where a claim does not fall within the direct payment procedure or of the reasons which may lead to no compensation being offered, these being left to the discretion of the insurers.
The Antitrust Authority thinks the decree must stipulate mechanisms to guarantee the broadest possible application of direct payments so as to have the desired effect of containing premiums to the benefit of consumers, foreseeing oversight and discipline of the correct, timely application of these procedures by the insurance industry.
Rome, 7 February 2006