FERMA urges caution on EU insurance contract law changes

The Federation of European Risk Management Associations (Ferma) urged the European Commission to take a cautious approach to any regulatory changes to EU insurance contract law.

Ferma responded to the final report by an expert group that has been considering whether differences in contract law between EU countries are an obstacle to the cross-border provision of insurance.

The umbrella association for European risk managers welcomed the conclusion of the expert group that insurance products for large risks are already widely distributed on a cross-border basis.

Ferma president, Julia Graham, said: “Industry needs tailor-made insurance products to support and secure its development. Insurance coverage must fit the diversity of operators, their multiple locations and their different exposure to risks.

“Differences in insurance contract laws that could be obstacles to such tailor-made insurance products are overcome thanks to the large degree of contractual freedom and free choice of law that currently exist.”

Following Ferma’s comments, the European Commission will deliberate with stakeholders, including consumers, businesses and the insurance sector, which could lead to a formal consultation in the form of a Green Paper.

Following the elections in May, the new European Parliament and its legal affairs committee could also decide to produce an initiative report to express its position regarding the matter.