Irish Competition Authority Decisions

1. Notification was made by Irish National Gesa Assistance Ltd (INGA) on 30 September 1992 with a request for a certificate under Section 4(4) of the Competition Act, 1991 or, in the event of a refusal by the Competition Authority to grant a certificate, a licence under Section 4(2) in respect of a shareholders agreement relating to INGA which was entered into with effect from 12 December 1991.

2. The notification concerns a shareholders agreement between Irish National Insurance Company plc (INI), Groupe European SA (GESA) and INGA relating to the subscription by INI and GESA for shares in INGA. Details of the arrangements were furnished to the Minister for Industry and Commerce on 20 November 1991 but were not regarded as notifiable under the Mergers, Take-overs and Monopolies Control Acts 1978 and 1987.

3.(i) INGA was incorporated within the State on 12 December 1991 as a vehicle for a joint venture between INI and GESA to provide emergency assistance services for private motorists and householders. At the date of the agreement, it had an issued share capital of £2 in 2 ordinary shares held by INI. INGA is currently engaged in the operation, through outside contractors, of a motorist and householder emergency assistance scheme. The Motor Assist and Home Assist schemes are marketed by INI through its branch network which also provides the administration services for INGA.

(ii) INI is an Irish company established in 1919 and is engaged in the underwriting of fire, accident, engineering and marine insurance. INI is a wholly owned subsidiary of New Ireland Holdings plc, an Irish publicly quoted company engaged in the business of insurance. 83% of New Ireland's shares are owned by UAP International which is part of L'Union des Assurances de Paris (UAP), the largest insurance group in France and the second largest insurance group in Europe. UAP controls New Ireland Holdings plc, whose results are consolidated in UAP's annual accounts. According to the Annual Report for New Ireland Holdings plc in 1991 its board included 4 representatives from UAP.

(iii) GESA is a Belgian company engaged in the business of insurance and is a wholly owned subsidiary of General Europea SA, Spain which at the time of the agreement was an 80% owned subsidiary of UAP. Subsequently UAP acquired 100% of the shares in GESA. GESA also has a network of 18 emergency assist services serving specific geographical areas throughout the world.

4. The notified agreement was entered into with effect from 12 December 1991 to provide for the subscription by INI for 50,998 ordinary £1 shares, and by GESA for 49,000 ordinary £1 shares, in INGA so as to bring its issued share capital up to £100,000 and to regulate the future conduct of the business of the company and the relationship between the shareholders.

5. Section 4(1) of the Competition Act 1991 prohibits and renders void all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services in the State, or in any part of the State.

6. Section 3(1) of the Competition Act defines an undertaking as "a person being an individual, a body corporate or an unincorporated body of persons engaged for gain in the production, supply or distribution of goods or the provision of a service".

7. INI is engaged for gain in the underwriting of insurance and is therefore an undertaking. GESA is similarly engaged and is also an undertaking. INGA is engaged in the operation of customer assistance schemes for gain and is also an undertaking. The notified agreement is an agreement between undertakings. The agreement has effect within the State.

8. The notified arrangements constitute an agreement between two subsidiary companies within a major international insurance group for a separate joint venture company to operate a new service in the State for their policy holders. One partner in the joint venture, INI, provides the marketing, administration and underwriting support to the venture while the other, GESA, supplies the expertise and a back up, internationally based, manned telephone service. The three parties to the agreement are all subsidiaries of UAP over which UAP holds, directly or indirectly, the ultimate 100% control. As indicated in its decision on AGF-Irish Life Holdings plc ¹ the Authority does not normally regard subsidiaries of the same company as independent of one another but rather as separate arms of the same undertaking and considers that agreements between them do not normally offend against Section 4(1). Given the control exercised by UAP on its subsidiaries, none of the subsidiaries has full freedom to determine its own course of action on the relevant market and they are not therefore in competition with one another. The notified agreement does not affect competition and does not offend against Section 4(1) of the Competition Act.

9 . In the Authority's opinion Irish National Insurance Company plc, Groupe Europeen SA and Irish National Gesa Assistance Ltd are undertakings within the meaning of Section 3(1) of the Competition Act, 1991 and the notified shareholders agreement is an agreement between undertakings. In the Authority's opinion the notified agreement does not offend against Section 4(1) of the Competition Act, 1991

10. The Competition Authority has issued the following certificate:

The Competition Authority certifies that, in its opinion, on the basis of the facts in its possession, the Shareholders Agreement, which was entered into with effect from 12 December 1991, between Irish National Insurance Company plc, Groupe Europeen SA and Irish National Gesa Assistance Ltd, notified under Section 7 on 30 September 1992 (notification no. CA/233/92) does not offend against Section 4(1) of the Competition Act, 1991.

For the Competition Authority.

Des Wall

Member.

12 September 1995

^1. AGF-Irish Life Holdings, Decision No. 2, 14 May 1992