German industrial insurers await fines decision from federal court

In a recent verdict, the Oberlandesgericht Düsseldorf said the rules for interest calculations on cartel fines imposed by the federal cartel office on 16 industrial insurance companies, as well as some board members and leading employees, were unconstitutional. It passed the matter on to the Federal Constitutional Court.

“We are waiting for the sentence from Karlsruhe before taking further measures,” Axa-spokesman Ulrich Bockrath told Commercial Risk Europe. “But we hope that the decision will be in our favour, which we expect due to the decision the Oberlandesgericht Düsseldorf made in the first place.”

In 2005, the cartel office accused industrial insurers such as Allianz, Axa, Gothaer and HDI-Gerling of being involved in anti-competitive activities between July 1999 and March 2003. It told them that they had to pay fines totalling €150m.

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Allianz alone had to cough up €34m. Axa was fined €26m, HDI-Gerling €25m and Gothaer €6.4m. Most of the companies felt the accusations to be unjustified and lodged objections against the fines. Others, such as Allianz and Württembergische, paid their fine and did not appeal. It soon became clear that the objections would be dismissed, and the remaining insurance companies withdrew their appeals in 2009.

Altogether the cartel office calculated a further €25m was payable by 14 insurers as interest over the period between the issuing of the fine and the actual payment. A spokesman for the office said that there was ‘no room for manoeuvre in this matter’.

The rules state that, as from 2005, such interest has to be charged. The ruling was introduced as the federal government feared that companies would file objections to fines to delay payments.

With the other industrial insurers affected Gothaer, from which the cartel office demanded €1.7m in interest, brought an action to the Oberlandesgericht Düsseldorf. It argued that the regulation was only introduced three months after the fine notice was issued and was thus punishing the insurers retrospectively.

The insurers now expect the Karlsruhe Court to confirm the Düsseldorf verdict. HDI spokesman Christoph Groffy told CRE that he doubts whether the claim for interest is constitutional.