This action might not be possible to undo. Are you sure you want to continue?
JUDGMENT OF T H E COURT 27 January 1987*
In Case 45/85 Verband der Sachversicherer e.V. [Property Insurers' Association], whose registered office is in Cologne, represented by Christian Hootz, Rechtsanwalt, Stuttgart, with an address for service in Luxembourg at the Chambers of Ernest Arendt, 34 B rue Philippe-Il, applicant, supported by Gesamtverband der Deutschen Versicherungswirtschaft eV for the German Insurance Industry], whose registered office sented by Hansjürgen Herrmann, Rechtsanwalt, Cologne, service in Luxembourg at the Chambers of Jacques Loesch, [General Association is in Cologne, reprewith an address for 2 rue Goethe, intervener, v Commission of the European Communities, represented by its Legal Adviser, Norbert Koch, assisted by Barbara Rapp-Jung, Rechtsanwältin, Frankfurt am Main, whose Chambers are in Brussels, with an address for service in Luxembourg at the office of G. Kremlis, a member of its Legal Department, Kirchberg, defendant, APPLICATION for a declaration that Commission Decision N o 85/75/EEC of 5 December 1984 relating to a proceeding under Article 85 of the EEC Treaty (IV/30.307 — Fire insurance) (Official Journal 1985, L 35, p. 20) is void, THE COURT composed of Lord Mackenzie Stuart, President, C. Kakouris and T. F. O'Higgins (Presidents of Chambers), T. Koopmans, U. Everling, K. Bahlmann and J. C. Moitinho de Almeida, Judges, Advocate General: M. Darmon Registrar: D. Louterman, Administrator
* Language of the Case: German.
to represent. which was notified to the applicant on 10 December 1984 and was published in the Official Journal (Official Journal 1985. L 35. whose registered office is in Cologne. the Verband der Sachversicherer e.JUDGMENT OF 27.. after hearing the Opinion of the Advocate General delivered at the sitting on 20 November 1986. 1987 — CASE 45/85 having regard to the Report for the Hearing and further to the hearing on 5 June 1986. 2 The applicant is an association whose objective is.307 — Fire insurance). is void. 20). gives the following Judgment 1 By an application lodged at the Court Registry on 15 February 1985. p. inter alia. promote and protect the business interests of insurers providing industrial fire and consequential loss insurance and authorized to carry on business in the territory of the Federal Republic of Germany. 1.V. brought an action under the second paragraph of Article 173 of the EEC Treaty for a declaration that the Commission's decision of 5 December 1984 relating to a proceeding under Article 85 of the EEC Treaty (IV/30. 448 . 4 In support of its application the applicant makes the following six submissions: First submission: Article 85 (1) is not yet applicable to the insurance industry in full and without qualification. By that decision both negative clearance under Article 2 of Regulation No 17 and exemption under Article 85 (3) of the EEC Treaty are refused. 3 The contested decision states that the applicant's recommendation of June 1980 to re-establish stable and viable conditions in the insurance sector providing insurance against the risk of industrial fire and consequential loss constitutes an infringement of Article 85 (1) of the EEC Treaty.
the previous history of the dispute and the submissions and arguments of the parties. however. It supports all the applicant's submissions and stresses in particular the validity of the first two submissions and the danger for the whole insurance industry of a rigorous and inflexible application of Community competition law to that sector. Article 87 (2) (c) of the EEC Treaty. Fifth submission: trade between Member States was not affected by the recommendation. 449 .V. by providing that the purpose of the provisions to be adopted by the Council to give effect to Articles 85 and 86 is to define. First submission: applicability of Article 85 (1) to the insurance industry 7 The applicant does not dispute that. referring to an expert's report which it produced to the Court. in the various branches of the economy. 6 Reference is made to the Report for the Hearing for the provisions of German law concerning insurance. intervened in the case in support of the applicant's conclusions. are applicable to the insurance industry.. Fourth submission: the applicant's recommendation had neither the object nor the effect of restricting competition. s The Gesamtverband der Deutschen Versicherungswirtschaft e. which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court. Sixth submission: the Commission was wrong in its view that the necessary conditions which must be met for exemption under Article 85 (3) were not satisfied. the competition rules contained in Article 85 er seq.VERBAND DER SACHVERSICHERER v COMMISSION Second submission: the Commission has no power to intervene in the economic policy of a Member State. It maintains. which is the federation of trade associations of insurance undertakings in the Federal Republic of Germany. Third submission: the applicant's recommendation which is the subject of the contested decision does not constitute a decision of an association of undertakings within the meaning of Article 85 (1). in principle. that the Community competition rules cannot be applied to the insurance industry without restrictions or reservations as long as the Council has failed to adopt special rules for their application to insurance.
9 They point out that those characteristics of the insurance industry have led the national legislatures to lay down special provisions for that industry. require cooperation rather than unlimited competition between insurers for the purpose of calculating the necessary reserves and ensuring that income and expenses balance so that there is no risk of insolvency. 1987 — CASE 45/85 the scope of Articles 85 and 86. the Bundeskartellamt [Federal Cartel Office].JUDGMENT OF 27. German legislation provides for a general system of supervision of insurance companies. The authority with jurisdiction in competition matters. 8 In that respect the applicant and the intervener state that a contract of insurance differs from other contracts in the fact that performance by one of the contracting parties is dependent on a completely uncertain factor. without being sure that when the time comes the insurer will be in a position to make good the loss covered by the contract of insurance. Accordingly. io The applicant and the intervener conclude from the foregoing that until the adoption by the Council under Article 87 (2) (c) of the EEC Treaty of special provisions relating to insurance the prohibition contained in Article 85 (1) of that Treaty does not apply to the insurance industry and that the Commission cannot. in particular in the sphere of industrial fire risks. 1. From that point of view the protection of the insured person is of particular importance since he performs his part of the contract. namely the materialization of the insured risk. variations in the occurrence of claims in certain fields. imposes an obligation on the Council to temper the rigour of the prohibitions contained in the Treaty in so far as is necessary to ensure the survival of certain areas of economic activity. Unlimited competition in the insurance industry would result precisely in an increased risk of some insurance companies going out of business in view of the special characteristics of that industry. 450 . can intervene only in cases where the agreements or decisions in question constitute abuse of an existing market position. the requirement that foreign insurers must be authorized to carry on an insurance business in the Federal Republic and special rules concerning the impact of the supervisory system on competition law. namely the payment of the premiums. Paragraph 102 of the Gesetz gegen Wettbewerbschränkungen [Law against Restraints on Competition] provides that the general prohibition of agreements and decisions restricting competition does not apply where the agreements and decisions are linked to matters which are subject to supervision by the Bundesaufsichtsamt für das Versicherungswesen [Federal Supervisory Office for the Insurance Industry].
is That conclusion in no way implies that Community competition law does not permit the special characteristics of certain branches of the economy to be taken into account. as is the case with certain sectors of the transport industry such as sea and air transport. 87) lays down detailed rules for the implementation of Articles 85 and 86 of the EEC Treaty for all the branches of the economy to which the provisions apply with the sole exception of those branches covered by special rules laid down on the basis of Article 87 of the EEC Treaty. contribute to the creation of a position which Article 87 (2) (c) intended to avoid. whilst doubting whether Article 87 (2) (c) can constitute authority for the Council to restrict the application of the competition rules laid down in the Treaty. No exception of that type. It did so in Article 42 of the EEC Treaty in relation to the production of and trade in agricultural products. where the Treaty intended to remove certain activities from the ambit of the competition rules it made an express derogation to that effect. 1 1 The Commission. within the framework of its power under 451 . that in principle the competition rules are applicable to all branches of the economy and that therefore those rules apply without restriction to the insurance industry. English Special Edition 1959-62. 1 3 It must also be observed that Regulation N o 17 of the Council of 6 February 1962 (Official Journal.VERBAND DER SACHVERSICHERER v COMMISSION by applying that prohibition. Neither a provision excluding the application of the competition rules in the manner of Article 42 nor a provision making their application dependent upon a Council decision exists in respect of insurance. however. It is for the Commission. p. confines itself to pointing out that the Council has adopted no special provisions relating to insurance on the basis of Article 87 (2) (c). applies without restriction to the insurance industry. it must be concluded that the Community competition system. exists in the case of the insurance industry. 1 4 Consequently. as set out in particular in Articles 85 and 86 of the EEC Treaty and in the provisions of Regulation N o 17. i2 It should be pointed out that. as was stated by the Court in its judgment of 30 April 1986 (Joined Cases 209 to 213/84 Ministère public v Asjes  ECR 1425).
by its decision. 452 . i9 The Commission maintains that. by virtue of the primacy of Community law. however. The complete supervision of insurance business in the Federal Republic of Germany. is The intervener adds that. that industry can operate in a manner which respects the requirements of the profitable management of undertakings and of adequate protection for insured persons only if harmonization is brought about between the competition rules and the legislation concerning the supervision of insurers. The German rules constitute a good example of such harmonization since they attempt to reconcile the objectives of the two fields of legislation in question. That delicate balance would. the isolating of the national market by the relevant legislation and the limitation placed on prohibitions of cartels constitute a coherent whole representing a particular choice of economic policy. It is entitled to act in that manner by virtue of the direct applicability of Article 85 (1) to undertakings in the Member States. it does not prohibit national measures of economic or competition policy but merely a private cartel set up independently by undertakings. in the absence of a special set of Community rules concerning competition in the insurance industry. and in cases of conflict between that provision and national competition law. 1987 — CASE 45/85 Article 85 (3) to grant exemption from the prohibitions contained in Article 85 (1). 1. Second submission: encroachment on national economic policy i7 The applicant maintains that Article 85 (1) is directed solely at undertakings and that its aim is not to prohibit national measures of economic or competition policy. to take account of the particular nature of different branches of the economy and the problems peculiar to them. ie It follows from the foregoing that the first submission must be rejected. No provision of the Treaty authorizes the institutions of the Community to contest such a choice and thereby to compromise the conduct of national economic policy.JUDGMENT OF 27. be disrupted if the Commission could intervene on the basis solely of considerations derived from competition law.
25 The second submission must therefore be rejected. However. 24 Moreover.VERBAND DER SACHVERSICHERER v COMMISSION 20 The Commission also observes that it was conscious. Article 3 (f) and the second paragraph of Article 5 of the EEC Treaty that provisions of national law or national administrative practices may not adversely affect the application in full of the Community competition rules. it follows from the combined provisions of Article 85. The applicant has not been able to show that in this case the application of the prohibitions contained in Articles 85 and 86 of the EEC Treaty might be such as to impede the proper functioning of the national system of supervision of insurers. 453 . 22 With regard to the application of national laws concerning the supervision of insurance companies. of the fact that the recommendation to which it related had already been authorized by the Bundeskartellamt under the Law against Restraints on Competition and by the Bundesaufsichtsamt. when it adopted its decision. whilst it is true that the legislation of a Member State may establish a close link between the application of competition law and the law relating to the supervision of the insurance industry. 23 It must be added that. those circumstances cannot stand in the way of the application of Article 85 of the EEC Treaty. 2i It must be observed in the first place that it is difficult to imagine in what respect the economic policy of the Federal Republic of Germany is supposed to be frustrated by the contested decision which is limited to objecting to a recommendation of an association of undertakings in relation to the price of their services. in so far as the applicant maintains that the special nature of the insurance sector involves the need for the undertakings concerned to collaborate in the statistical studies which are indispensable for the calculation of the loss ratio. Community law does not. it must be stated that the contested decision does not relate to such a form of collaboration. it must be pointed out that those laws have a different objective from that of Community competition law and that they may continue to be operative regardless of the manner in which the competition law is applied. make the implementation of the provisions of Articles 85 and 86 of the EEC Treaty dependent upon the manner in which the supervision of certain areas of economic activity is organized by national legislation. however.
1. Although the title of the recommendation describes it as 'non-binding'. as is indicated by its title. is competent merely to examine technical problems and not to adopt decisions binding on the association or its members. 27 28 29 In that connection account must be taken of various factors.JUDGMENT OF 27. The applicant contends that. It is sufficient that the recommendation is in conformity with the association's statutes and that it was brought to the notice of its members as a statement of the policy of the association of undertakings in the manner laid down therein. which was not disputed on this point. 1987 — CASE 45/85 Third submission: the non-binding nature of the recommendation 26 The contested decision finds that the Verband der Sachversicherer is an association of undertakings within the meaning of Article 85 (1) of the EEC Treaty and that the recommendation to re-establish stable and viable conditions of June 1980 was adopted by the competent body under the association's statutes and was duly brought to the notice of its members as an official statement of the association's policy by the secretary-general acting within the powers conferred on him. it is nevertheless in the nature of a 'decision' of an association of undertakings. The committee of experts on industrial fire and consequential loss insurance. according t o the provisions of those statutes. The only organs of the association with the power to adopt decisions of such a nature are the general meeting of its members and the bureau. the recommendation is not at all binding in nature. T h e C o m m i s s i o n replies t h a t the V e r b a n d d e r Sachversicherer was a u t h o r i z e d by its statutes t o regulate the commercial c o n d u c t of its members a n d t h a t the committee of experts w h i c h p r o d u c e d the r e c o m m e n d a t i o n was e m p o w e r e d . stated that insurance companies 454 . In a d d i t i o n . which produced the recommendation. to a d o p t decisions and r e c o m m e n dations binding o n the association. The contested decision. In fact neither of those organs adopted a decision with regard to the recommendation. the r e c o m m e n d a t i o n s of an association of u n d e r t a k i n g s . whereas the loss ratio and insurers' expenses had not varied appreciably during the same period. w h i c h are formulated by committees acting within the f r a m e w o r k of the association a n d w h i c h are c o m m u n i c a t e d to the association's members. In the first place it is common ground that the insurers who are members of the Verband der Sachversicherer had a common interest in putting the market on a viable footing by means of an increase in premiums which had fallen considerably between 1973 and 1980 in the industrial fire insurance sector. constitute the expression of a concerted practice p u t into effect b y the u n d e r t a k i n g s affiliated to the association with the object of restricting c o m p e t i t i o n between those u n d e r t a k i n g s .
Fourth submission: restriction of competition 34 The contested decision finds that the recommendation has the object of restricting competition in industrial fire and consequential loss insurance within the common 455 ." takings within the meaning of Article 85 (1) of the EEC Treaty. to do business in several classes of commercial insurance. 33 Consequently. flat-rate and across-the-board increase in premiums. regardless of what its precise legal status may be. the statutes of the association state that it is empowered to coordinate the activities of its members. as composite insurers or through sister companies connected with the same group. the third submission must be rejected. that the task of the specialist committee on industrial risks is to coordinate the policy of the members with regard to premium rates and that the decisions or recommendations of the committee are deemed to be definitive unless they are referred to the bureau for approval at the request of one of the organs expressly given such a power of reference. it lays down in mandatory terms a collective. it is necessary to take account of the nature of the recommendation itself. It must therefore be concluded that it amounts to a decision of an association of under. 3i Thirdly. Although it was described as a 'non-binding recommendation'. 3o Secondly. 32 In view of those factors it must be stated that the recommendation. especially in relation to competition.VERBAND DER SACHVERSICHERER v COMMISSION did not respond individually to that negative trend by raising premium rates because it was their practice. they therefore attempted to win substantial business in other classes by charging their commercial customers fire-insurance premiums which were insufficient to cover their expenses. constituted the faithful reflection of the applicant's resolve to coordinate the conduct of its members on the German insurance market in accordance with the terms of the recommendation. That that was the result intended may also be seen from the fact that shortly after the recommendation was notified to the members of the Verband der Sachversicherer German re-insurance companies decided to include in their contracts of re-insurance concerning the same risks a special 'premium calculation clause' according to which premium rates which fail to conform to the recommendation are to be treated in the event of a claim as under-insurance.
1. In the first place it is necessary to fix premiums at an appropriate level.JUDGMENT OF 27. Secondly. 37 The Commission states in the first place that it suffices for the purposes of the application of Article 85 (1) that it is apparent from a decision of an association of undertakings. 456 . 36 The same arguments are put forward by the intervener. according to the applicant the recommendation has hardly been acted upon in practice. 35 In support of its submission directed against those findings the applicant relies primarily on three arguments. that its objective is the restriction of competition. analyses which cannot be carried out without the participation of all insurers. First. it states that the Commission failed to check whether the recommendation led the undertakings to alter their conduct. it is unnecessary to consider its effects. taking into account the economic context. it states that the recommendation does not seek to attain any objective in the field of competition since it merely represents the expression of a method of cooperation which is usual and necessary in the insurance industry given the special characteristics of that industry with regard in particular to the calculation of risks. disputes that the recommendation failed to produce any effect. Secondly. If that is the case. constitute a restriction of competition. the applicant relies in particular on the Court's judgment of 25 October 1977 (Case 26/76 Metro SB-Grossmärkte GmbH & Co. This is the only method of ensuring in the long term that contracts of insurance will be performed. in order to fix that premium level it is necessary to carry out thorough statistical analyses relating to the data of the market as a whole. in principle. the Commission. Finally. who lays emphasis in particular on the two requirements which the insurance industry has to face. Secondly. The reasons set out in the decision in support of that conclusion emphasize in particular the fact that the premium rates were increased acrossthe-board. 1987 — CASE 45/85 market. KG v Commission  ECR 1875). the fact that the applicant includes all insurers doing business on that market in the Federal Republic of Germany and the reinforcement of the restrictive effect of the recommendation by the insertion of the premium calculation clause by the re-insurers who occupy a strong position on the German market. relying on the figures for the loss ratio between 1979 and 1983 and for premium income during the same period. it states that the Court of Justice has accepted in its decisions that objective criteria applied in connection with the choice of the channel of distribution and the network of distributors does not.
457 . they are both the authors and the addressees thereof. 4i Thus through the instrument of the recommendation the association sought to achieve a collective fixed-rate increase in the price of the services offered by its members. It was with that in mind that the recommendation tackled the cause of the imbalance. The Commission was consequently correct in limiting its examination initially to the objective of the recommendation without considering what were its effects. In that respect it must be noted that the very first example given by Article 85 (1) (a) of anti-competitive conduct concerns an agreement. and it is sufficient to state that Article 85 (1) does not permit those insurers to extend their concertation to the price which they apply on the market for the service which they provide. namely competition by means of ever lower premiums. restricting or distorting competition. decision or concerted practice whose object is 'directly or indirectly [to] fix purchase or selling prices or any other trading conditions'. Since the members of the association participated in the formulation of the recommendation. In the latter capacity they know what action each of them may expect the others to take. 4 There is therefore no need to examine whether the statistical analyses needed for 2 the calculation of premiums presuppose the cooperation of all insurers concerned with a particular class of insurance. by providing for an across-the-board increase in premiums. it is unnecessary to consider the actual effects of an agreement if it is apparent that it has the object of preventing. 40 In that connection it must be noted that the aim of the recommendation at issue was to restore sound financial conditions for the undertakings whose financial position was adversely affected by insufficient premium income as against the foreseeable costs of claims. The same principle applies to a decision of an association of undertakings. as was maintained by the intervener. 39 As the Court has consistently held.VERBAND DER SACHVERSICHERER v COMMISSION 38 The Commission also takes the view that the arguments put forward by the applicant and the intervener misunderstand the function of a recommendation of an association of undertakings as a means of coordinating the commercial conduct of those undertakings.
The branches of foreign insurance companies cannot be regarded. 1. as an 'extended arm' of the parent company. according to German law. the application of which could exert pressure also affecting Community fire insurers doing business in the Federal Republic of Germany but having their head office elsewhere. Fifth submission: effect on trade between Member States 44 The contested decision states that the fact that trade between Member States is affected derives in the first place from the fact that the recommendation was also addressed to fire insurers whose head office was in a Member State other than the Federal Republic of Germany but who pursued their business on German territory either as leading or sole insurer or as co-insurer.JUDGMENT OF 27. in any event. Although it is true that the German Insurance Supervision Law requires insurers to have a branch in the Federal Republic. the requirement of establishment is not applicable — there is abso458 . as was stated in the decision. Consequently. since the conclusion of such contracts was made impossible by German legislation which lays down the requirement that foreign insurance companies must be established in the Federal Republic. the recommendation relates to national situations only. The applicant adds that. That isolation was reinforced by the application of the premium calculation clause by the re-insurers. it points out that with regard to co-insurance business — the sole area where. 1987 — CASE 45/85 43 It follows that the recommendation had as its object the restriction of competition on the market in industrial fire and consequential loss insurance and that therefore the fourth submission must also be rejected. from a competition point of view. merely as an extended arm of the foreign insurer. the competitive position of foreign insurers was not altered by the recommendation. 45 Secondly. 46 The applicant disputes the Commission's findings on this point and sets out a number of arguments the essence of which may be summarized as follows. the decision finds that the premium recommendation was likely to have the effect of isolating the market in question between Member States and of hindering the economic interpénétration sought by the EEC Treaty. on the contrary. such a branch must be regarded. branches constitute autonomous economic entities and therefore independent undertakings from the point of view of competition law. There is no trade between the Member States because insurance services are not provided across frontiers. except in the case of co-insurance which is governed by a Council directive.
even by means of their branches. Consequently. Nevertheless. as regards premiums. but there is no need for the Court to go into these matters. The fact that the branch alone is affected by the recommendation does not exclude the possibility that the financial relationship between the branch and the parent company might be affected by that fact. co-insurers follow the leading insurer in the co-insurance arrangement.VERBAND DER SACHVERSICHERER v COMMISSION lutely no freedom of action since. the requirement that an insurance company which has its head office in another Member State but which seeks to pursue its business on German territory must set up an establishment in that territory does not have the effect of excluding the existence of trade between Member States in insurance services. 48 In the first place. the recommendation tends to make access to the German market more difficult. 459 . a more competitive service. so Secondly. Although the provisions of German law permit certain activities affecting trade between Member States. 47 The Commission's defence gave rise to detailed discussion with regard to the concept of a 'branch' and its status in law. such companies could take part in insurance business in the Federal Republic of Germany if they established a branch in that country or if they participated in co-insurance for covering a risk situated there. as it considers that the two reasons stated in the contested decision are correct and that they justify the conclusion that trade between Member States is capable of being affected by the recommendation. and that is so regardless of the degree of legal independence of the branch. an across-the-board increase in premiums which is not justified by the individual position of the undertakings concerned is capable of affecting the position of foreign insurers who are able to offer. 49 In that regard it must be recognized that when the Commission adopted its decision German legislation was very restrictive with regard to the conduct of insurance business in the Federal Republic of Germany by insurance companies whose head office was in another Member State. they cannot be relied upon in order to frustrate the application of Article 85 (1) to restrictions on competition relating to those very activities.
that the recommendation goes beyond what can be regarded as acceptable cooperation between insurers in collectively analysing statistics regarding claims and translating the results into practical guidance for writing policies. finally. as a result. Sixth submission: conditions for the application of Article 85 (3) 52 The recommendation was notified to the Commission on 23 September 1982. the applicant does. 20 or even 30% constitutes a measure contributing to an improvement in the provision of services in the insurance industry. That it exceeds what is acceptable is shown not only from the fact that increases of 10. however. The decision finds that. it is not without interest that the Bundeskartellamt has decided. namely that the statistics of the individual companies with regard to claims are insufficient to enable a proper calculation to be made. that it does not follow that a decision by an association to recommend premium increases of 10. is correct as such. In that regard the contested decision recognizes that one of the applicant's main arguments. 54 The dispute between the parties turns in particular on the question whether the recommendation was capable of contributing to an improvement in the provision of services in the insurance sector. in relation to the application of German law. that the recommendation does not constitute an abuse. the fact that the purpose of insurance and the relevant legislative provisions require that the insurer must at all times be capable of meeting the obligations arising from insurance contracts whilst keeping the different classes of business separate. Likewise. The contested recommendation was objectively necessary to re-establish the profitability of insurance companies whilst safeguarding the interests of insured persons. 55 The contested decision states. contest the decision and claims that all the conditions for the grant of exemption were met. 1. 20 or 30% fail to take into account the cost and 460 . 1987 — CASE 45/85 si In those circumstances the fifth submission must fail. The Commission adds. no exemption may be granted in respect of the period between June 1980 and the date of notification. does not mean that an across-the-board increase in premiums is capable of improving insurance services.JUDGMENT OF 27. however. In that connection. 53 With regard to the period subsequent to the date of notification. by virtue of Article 4 (1) of Regulation N o 17. The applicant did not dispute that statement.
56 According to the applicant. It emphasizes that the Commission failed to take into account the effect of the recommendation on classes of insurance other than fire insurance. but also to assess whether the measures put into effect by the recommendation went beyond what was necessary to that end. The recommended increase in premiums was intended not only to ensure that contracts of insurance against industrial fire risks would be performed in the long term but also to free other classes of insurance of expenses for which they were not responsible. provided in all cases for the same percentage supplements for expenses and profit as percentages of statistically determined claims. The question to be considered is whether the 461 . 57 That argument is supported by the intervener. As a result of the re-establishment of viable conditions in the fire insurance sector the other classes of insurance are able to improve their services. In that connection the Commission correctly took the view that its task was not merely to check whether the aim of the recommendation was to deal with the actual problems confronting the market as a result of the continuing fall in premiums for industrial fire and consequential loss insurance and to consider whether the recommendation was a proper means of dealing with that situation. recommendations with regard to gross premiums are objectively necessary and are applied throughout the whole world.VERBAND DER SACHVERSICHERER v COMMISSION revenue situations of individual insurers but also that. 59 In that connection it is not necessary to examine all the arguments put forward and the expert reports produced to the Court concerning the effect of the recommendation on 'gross' premiums and the need for an association of undertakings seeking to re-establish viable conditions in the sector in question to take the 'gross' premiums as its starting point. It points out that the recommendation relates solely to an increase in the level of premiums actually charged and not to gross levels. se With regard to those arguments it must be emphasized that the Commission's task under Article 85 (3) is to determine whether the contested recommendation contributes to improving the provision of services on the insurance market. Nevertheless. that reasoning is incorrect. they were based on the fixing of a gross premium which. ignoring the situation of individual insurers. according to the very principle of those increases.
eo By reason of its general and undifferentiated nature the increase involved a rise in premium rates which encompassed not only cover for the expenses resulting from insurance claims but also the operating costs of the insurance companies. must bear the costs arising from its intervention. consequently.. from the point of view of competition law. I. 63 It follows from the w h o l e of the foregoing t h a t the application must be dismissed in its entirety. the Commission did not exceed the limits of the discretion vested in it in connection with the application of Article 85 (3) of the EEC Treaty. cannot be accepted. fixed-rate and across-the-board increase in premiums was justified by the objective pursued. ei By taking the view that in those circumstances the disadvantages arising from the solution chosen were. there was no improvement in the provision of services in the insurance market. which intervened in support of the applicant.JUDGMENT OF 27. so that the Commission was obliged to grant exemption from the prohibition contained in Article 85 (1). it must be ordered to pay the costs. The global nature of the increase was therefore likely to result in restrictions on competition going beyond what was necessary to achieve the intended objective. The Gesamtverband der Deutschen Versicherungswirtschaft e. 1987 — CASE 45/85 collective. greater than the advantages and that. 62 Consequently. It is apparent from the documents before the Court that there were considerable differences in the level of operating costs between different insurance companies. Costs 64 Under Article 69 (2) of the Rules of Procedure. the unsuccessful party is to be ordered to pay the costs if they have been asked for in the successful party's pleading. 462 . The sixth submission must therefore be rejected. the contention that all the conditions for the application of Article 85 (3) were met. Since the applicant has failed in its submissions.V.
to bear the costs arising from its intervention.V. (3) Orders the applicant to bear the remainder of the costs. THE COURT hereby: (1) Dismisses the application. Mackenzie Stuart President 463 . P.VERBAND DER SACHVERSICHERER v COMMISSION On those grounds. (2) Orders the Gesamtverband der Deutschen Versicherungswirtschaft e. Mackenzie Stuart Koopmans Everling Kakouris Bahlmann O'Higgins Moitinho de Almeida Delivered in open court in Luxembourg on 27 January 1987. J. Heim Registrar A.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.