AS352 - LEGISLATIVE DECREE OF 30 JUNE 2006 AMENDING LEGISLATIVE DECREE NO. 209 OF 7 SEPTEMBER 2005, ENTITLED "PRIVATE INSURANCE CODE", UNDER ARTICLE 4 OF LAW NO. 229 OF 29 JULY 2003.
PRESS RELEASE
PRESS RELEASE
THIRD-PARTY AUTO INSURANCE: ANTITRUST AUTHORITY INSISTS INSURANCE DECREE SHOULD ENSURE CONSUMERS CAN COMPARE POLICIES
Customisable profiles should be available on the Internet. Publication of complete premium structures useless and risky for competition.
The text of the legislative decree of 30 June 2006 which amends Article 136 of the insurance code by introducing transparency of information regarding contract conditions for third-party automobile policies should be changed in order to guarantee that the consumer is really in a position to compare product offerings.
That is the view expressed by the Italian Competition Authority in a recommendation approved on 27 July 2006 and forwarded to Prime Minister Romano Prodi.
The Authority draws attention to the fact that, based on the new article, it is the direct responsibility of the Economic Development Ministry, using data that ISVAP is obliged to supply, to publish on its website complete and detailed tables of tariffs for all companies.
The Authority believes, however, that a distinction must be made between methods that facilitate consumers' ability to compare products, thus giving an advantage to companies which decide to lower their prices, and methods that, on the other hand, by merely increasing the “reciprocal” transparency among insurers, may potentially damage competition without affording benefits to car-owners.
The simple availability of the complete premium structures for all the insurance companies, instead of aiding the consumer, may in fact lead to distortions of competition, considering that the tariff tables for third-party automobile policies contain information that the companies use in defining their commercial strategies and that therefore should not be shared.
In order to offer guarantees to the consumer and encourage greater competition amongst the insurance companies, instead, a system should be devised to allow the individual to obtain directly from the Ministry's website a comparison, for equal cover (same sum insured, same exclusion and compensation clauses, etc.), of the various insurers' end prices according to an individual's profile. This is a system already used by the British Financial Services Authority whose website offers, for insurance and financial products different from third-party automobile insurance, comparative tables of the prices set by the different companies for individual customer profiles.
In its recommendation, the Authority desires that its observations be taken into account in the Economic Development Ministry's practical implementation of the provisions regarding the publishing of premium information for third-party automobile insurance, so as to foster greater competition in the insurance markets.
Rome, 31 July 2006