State aid refers broadly to interventions made by countries in support of specific companies or in other ways engaging in private markets. Within the EU, the level and kind of interventions that member states may make is controlled within a framework of rules. This includes a communication setting out the terms under which state or state-backed insurers may compete directly with private markets for risks considered ‘marketable’. Such interventions can provide valuable additional capacity if there are shortages, however, there are also risks given the potential for unfair competition which may arise. ICISA is therefore highly engaged in debates about the application of rules in this area and defending our members’ interests.
EU state aid rules were also central to the European response to the Covid-19 pandemic. Interventions made by member states to support the real economy were made possible due to the introduction of a temporary framework which provided for additional flexibility under state aid rules. This included many measures which directly supported liquidity levels in the real economy, but also related to the introduction of state reinsurance arrangements for credit insurance in a small number of markets.
ICISA has worked throughout the pandemic to help inform discussions on the introductions of these schemes, their performance over time, and the eventual withdrawal of schemes, ICISA has also provided research on the impact of these interventions and what lessons can be learned for future crises requiring similar levels of state intervention into the economy.
On matters related to state aid, ICISA aims to provide insight from our members, representing the vast majority of private capacity within the EU and worldwide. We engage closely with relevant public bodies to inform their decision-making and to defend the interests of members and the preservation of fair and open private credit insurance markets.
For more information on our position on state aid rules, or related topics, contact Daniel de Burca.