The UK insurance industry will escape heavy regulatory inter- vention at the hands of the European Commission, Insurance Times has learned.
Insurers and brokers were bracing themselves for a wave of red tape following the EC inquiry into anti-competitive practices in the sector.
But, as the 18-month inquiry comes to an end, leading insurance figures believe the UK will escape any further regulatory intervention.
It is understood that Philip Lowe, the commission's directorate-general for competition, has signalled that the EU will not introduce pan-European rules.
However, Lowe has indicated that some national competition authorities within the EU may be asked to examine markets, but that was unlikely to include the UK.
On a visit to London at the end of 2006, Lowe insisted it was now time to "turn the temperature down on this issue".
Chris Hannant, head of financial crime prevention and market regulation at the ABI, told Insurance Times that the early indications were positive for the UK.
He said: "Not having seen anything in terms of a detailed report and with a lot of work almost certainly having passed under the bridge since Lowe's visit, it is difficult to say that the industry is in the clear, but the signs are quite positive."
The inquiry, said Hannant, was sparked by a lack of understanding of European insurance markets by the EC. "The initial signs were that the EC did not understand insurance. Hopefully, as a result of this inquiry it will come through it with a better understanding and more comfort."
The commission, which will publish its interim report at the end of January, is believed to be revisiting certain areas of insurance following the inquiry including block exemption.
Block exemption is an exemption of certain defined activities from the EU competition law that are not necessarily anti-competitive.
Alexandra Kamerling, partner in EU competition and trade for law firm DLA Piper, said: "There are very strong indications that there is nothing specific relating to the London market that is raising concern.
"But the commission is talking about revisiting block exemption, which may well have some implication on what is going on in the London market."
The 18-month inquiry
June 2005: EC Competition Commissioner Neelie Kroes launches an inquiry into anti-competitive practices in business insurance.
February 2006: Brokers and insurers receive detailed questionnaires from the European Commission as part of the inquiry.
July 2006: A second wave of questionnaires is sent out to trade associations by the EC.
January 2007: The inquiry's interim report is expected to be published.
