The competition watchdog raided the offices of Discovery Limited, Hollard Insurance Group, Momentum, Old Mutual Insure, Sanlam, Professional Provident Society Limited, FMI (a division of Bidvest Life) and BrightRock Life. In a statement published on Thursday, the Competition Commission said the insurance companies shared information about the premiums they charge consumers for investment and insurance products. This enables the eight companies “to adjust the prices of their existing and new insurance products” — which is in contravention of the Competition Act, specifically the clause that discourages competition from being prevented or lessened. The commission didn’t reveal details of its investigation into the eight insurance companies, which it launched in January 2021. It’s unclear how long the alleged collusion among the companies has been running or if insurance policyholders (consumers) were disadvantaged by paying high premiums. If the insurance companies are found guilty, the commission might recommend that the Competition Tribunal, which rules on such cases, impose an administrative fine. The fines are usually equal to 10% of the revenues that the companies have generated over a fixed period, mostly over one year. The raid saw offices of insurance companies across Gauteng, KwaZulu-Natal and the Western Cape being searched as part of a process to gather evidence that could support the Competition Commission’s probe. During the searches, the commission seized documents and electronic data which will be analysed to determine whether the eight insurance companies contravened the Competition Act. The commission said it obtained warrants from high courts in Pretoria, Durban and Cape Town, authorising it to search the offices.
SOURCE: DAILY MAVERICK