Cape Town – The Competition Commission raided the premises of eight long-term insurance companies suspected of price-fixing.
The raids took place in Gauteng, Western Cape and KwaZulu-Natal at the head offices of BrightRock Life Limited; Discovery Limited; FMI, a division of Bidvest Life Limited; Hollard Insurance Group (Pty) Ltd, Momentum, a division of MMI Limited; Old Mutual Insure Limited; Professional Provident Society Limited and South African National Life Assurance Company (Pty) Ltd (Sanlam).
The body’s spokesperson, Sipho Ngwema, said the commission had reasonable grounds to suspect the insurers colluded to fix prices and/or trading conditions in respect of fees for investment products such as retirement annuity and premiums for risk-related products, namely, life insurance cover such as dread disease cover or chronic medical condition cover, disability cover, life cover and funeral assistance benefits in contravention of section 4(1)(b)(i) of the Competition Act.
“According to the information at the disposal of the commission, the companies under investigation share information on premium rates for risk-related products and fees for investment products, which enables them to adjust the prices of their existing and new insurance products,” said Ngwema.
The investigators seized documents and electronic data, which would be analysed together with other information gathered to determine whether these firms had contravened the Competition Act. The search was part of an investigation initiated by the commissioner, Tembinkosi Bonakele, in January last year.
A Sanlam employee who spoke to the “Weekend Argus” said the company told them to log out and stop working immediately.
“Later we got a notification that if investigators come to us with questions or want access to the company’s equipment, we must direct them to our legal department. Our exco has an emergency meeting as we speak.”
The commission revealed that these companies’ clients included corporate policyholders that buy cover such as retirement funds or group life schemes on behalf of their employees.
The commission has obtained warrants from the North Gauteng (Pretoria) High Court, Kwazulu Natal (Durban) High Court, and Western Cape High Court authorising it to search the offices of these companies.
“The search-and-seizure operation is part of the routine process of evidence gathering and we urge all involved to allow the investigation to run its course. The commission will at an appropriate stage reveal the outcome of the investigation,” said Bonakele.
Weekend Argus