AS497 - EXCLUSIVE SALES RELATIONSHIP BETWEEN INSURANCE COMPANIES AND AGENTS
PRESS RELEASE
PRESS RELEASE
INSURANCE: ANTITRUST AUTHORITY SAYS NO TO MODIFICATION OF MULTI-COMPANY AGENCIES AND RIGHT OF CUSTOMER WITHDRAWAL FROM MULTI-YEAR CONTRACTS
A number of amendments to Bill 1195 would negatively impact competition and consumer protection and could hinder the necessary reduction in premiums. Report sent to the Government and Parliament.
Proposed amendments to Bill 1195 under discussion in the Senate, having to do with the rules on multi-company insurance agencies and the insured's right of withdrawal, if approved, will have a negative impact on competition and consumer protection. This is the thrust of a report sent by the Italian Competition Authority to the Government and to Parliament.
In the Antitrust Authority's view, both the abolition of the prohibition on exclusivity clauses in insurance sales and limitations on the annual right of withdrawal in multi-years contracts, as proposed in the amendments, are diametrically opposed to the desired pro-competition developments in the insurance markets: only competition in sales networks and the potential mobility of customers can bring about a reduction in premiums. In the context of the present crisis, such a reduction is more than ever indispensable.
The Authority draws attention to the fact that the rules contained in Law no. 248 of 4 August 2006 pursue the important goal of encouraging the opening up of insurance sales networks by overcoming the historical single-agency relationship between a company and its agents. Widespread adoption of multi-company agencies, as championed by the Authority, is essential in order to bring a competitive thrust to the market because that would allow customers to buy policies from different companies at the same agency.
Just as important, in order to facilitate the end consumer's ability to move between insurers, is the annual right of withdrawal from multi-year contracts. The changes being discussed in the Senate, instead, would limit that right, allowing a change of insurer only after five years of the contract have elapsed. In this way the movement of customers, which is already difficult to encourage, would be seriously limited.
In the Antitrust Authority's view, competition can only be primed by positive stimuli coming from well-informed customers who are able to compare the various offerings with ease and without costly research and so are able to make a choice and quickly change supplier. This is an objective which must be pursued in order to protect and promote competition in the most effective and appropriate manner in an industry that is of prime importance for the national economy.
Rome, 6 February 2009