The Commission has sent an official statement of objections to the
International Group of P&I Clubs, claiming that some of their
arrangements unlawfully restrict competition and deny ship owners a
choice of liability cover.
P&I clubs offer their members protection and
indemnity marine cover against liability for contractual or third
party damages, such as oil pollution, crew or passenger injury and
collision with other vessels. P&I club arrangements include
provisions to share claims exceeding certain amounts. The
International Group of P&I Clubs holds approximately 90% of the
The International Group was granted a formal
exemption in 1985 from EC competition rules prohibiting
arrangements which restrict or distort competition (Article 85).
The exemption expired in 1995 and the Group requested a renewal.
Following an investigation, the Commission has concluded that,
although the arrangements provide benefits for the maritime
industry, some aspects are unduly restrictive of competition. It is
particularly unhappy about the 12-month rule. If a shipowner
decides to move to a new club within the Group, the rate charged by
his previous club lasts for one year.
The Group argues that the mutual system is
efficient and offers ship owners insurance cover independent of the
primary commercial market, which lowers their insurance costs. It
also denies that its activities are anti-competitive, mainly
because the agreements operate for only one year.
If the Group were to be disbanded, it says that
insurance costs would rise significantly and there would be large
reductions in cover.