The Competition Commission has raided the offices of the country's biggest insurance companies following suspicions of collusion.
The commission on Thursday pounced on offices of industry heavyweights Discovery, Momentum, Old Mutual Insure, Sanlam, Hollard Insurance Group, and Bidvest Life's FMI.
The firms in the multibillion-rand industry are accused of collusion when it comes to the pricing of retirement annuities and risk-related insurance products like funeral, disability, dread disease/chronic medical condition covers.
"The companies under investigation operate within the long-term insurance market. The most common form of investment-related product offered by the companies is retirement annuity, which becomes payable to the insured upon retirement."
The search and seizure operations conducted in Gauteng, KwaZulu-Natal and Western Cape also affected BrightRock Life and Professional Provident Society.
"The commission has reasonable grounds to suspect [these companies] have engaged in collusive practices to fix prices and/or trading conditions in respect of fees for investment products such as retirement annuity and premiums for risk-related products..." said the commission in a media statement.
The products included life insurance cover such as dread disease cover/chronic medical condition cover, disability cover, life cover and funeral assistance benefits in contravention of some section 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.
"The search and seizure operations are being conducted as part of an ongoing investigation that was initiated by the commissioner in January 2021. The operations are being conducted at five sites in Gauteng, two in Western Cape and one in KwaZulu-Natal."
The commission said the aim of the operation was to seize documents and electronic data, which will be analysed with other information gathered to determine whether these firms have contravened the act.
The body said it obtained warrants authorising it to search these companies from the North Gauteng High Court, KwaZulu-Natal High Court, and Western Cape High Court.
The body's commissioner, Tembinkosi Bonakele said: "The search and seizure operations are conducted with due regard to the rights of all affected persons. 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.”
Competition Commission cracks down on insurance collusion
Sector giants providing retirement annuity and funeral policy raided
Image: Alon Skuy
The Competition Commission has raided the offices of the country's biggest insurance companies following suspicions of collusion.
The commission on Thursday pounced on offices of industry heavyweights Discovery, Momentum, Old Mutual Insure, Sanlam, Hollard Insurance Group, and Bidvest Life's FMI.
The firms in the multibillion-rand industry are accused of collusion when it comes to the pricing of retirement annuities and risk-related insurance products like funeral, disability, dread disease/chronic medical condition covers.
"The companies under investigation operate within the long-term insurance market. The most common form of investment-related product offered by the companies is retirement annuity, which becomes payable to the insured upon retirement."
The search and seizure operations conducted in Gauteng, KwaZulu-Natal and Western Cape also affected BrightRock Life and Professional Provident Society.
"The commission has reasonable grounds to suspect [these companies] have engaged in collusive practices to fix prices and/or trading conditions in respect of fees for investment products such as retirement annuity and premiums for risk-related products..." said the commission in a media statement.
The products included life insurance cover such as dread disease cover/chronic medical condition cover, disability cover, life cover and funeral assistance benefits in contravention of some section 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.
"The search and seizure operations are being conducted as part of an ongoing investigation that was initiated by the commissioner in January 2021. The operations are being conducted at five sites in Gauteng, two in Western Cape and one in KwaZulu-Natal."
The commission said the aim of the operation was to seize documents and electronic data, which will be analysed with other information gathered to determine whether these firms have contravened the act.
The body said it obtained warrants authorising it to search these companies from the North Gauteng High Court, KwaZulu-Natal High Court, and Western Cape High Court.
The body's commissioner, Tembinkosi Bonakele said: "The search and seizure operations are conducted with due regard to the rights of all affected persons. 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.”
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