FERMA urges caution with E.U. national insurance contract law changes

The Federation of European Risk Management Associations is calling for a cautious approach to any changes to the regulatory treatment of differences between European Union national insurance contract laws, FERMA said in a letter to the European Commission on Thursday.

The Feb. 27 comprehensive final report by the commission's expert group on European insurance contract law “sheds light on the potential impact of national contract law differences over the use of insurance of products in the European Union,” FERMA said in a statement.

FERMA said it welcomed the conclusion of the expert group that insurance products for large risks are already widely distributed on a cross-border basis.

“Risk managers, as corporate insurance buyers, share the view that the provision of large risks insurance products on a cross-border basis is already occurring without any major obstacles arising from local insurance contract law provisions,” FERMA told the commission in its letter. “In our view, the current legal situation is more than satisfactory for cross-border operating organizations when it comes to negotiating contractual terms for specific coverage, and this gives E.U. companies a much-needed legal certainty and competitive advantage.”