Competition Commission raids insurance companies suspected of price-fixing

Competition Commission raids insurance companies suspected of price-fixing

The commission said it had reasonable grounds to suspect the companies, including industry heavyweights Discovery Limited and Momentum, colluded to fix prices and trading terms.

Momentum headquarters in Centurion. Image: Provided

JOHANNESBURG — The Competition Commission on Friday raided the premises of eight long-term insurance companies suspected of price-fixing.

The commission said it had reasonable grounds to suspect the companies, which include heavyweights in the industry, colluded to fix prices and trading terms.

The commission said the search and seizure operations were carried out as part of an ongoing investigation which was opened by the commissioner in January 2021.

Discovery Limited, FMI – which is a division of Bidvest Life Limited, Hollard Insurance Group and Momentum are among the companies suspected of working together to fix the prices of products such as retirement annuities, life insurance cover, disability coverage and funeral assistance. advantages.

The Competition Commission said that according to the information available to it, the companies under investigation shared information on premium rates for risk-related products and fees for investment products.
This then allowed them to adjust prices.

Commission spokesman Sipho Ngwema said: “We have been to five sites in Gauteng, two in the Western Cape and one in KwaZulu-Natal where we are looking for information – whether in documents or electronically, in support of our investigation”.

Other companies reported include Old Mutual, the South African National Assurance Company and Sanlam.

Investigators will analyze the information to determine if these companies violated the Competition Act. Ngwema said they hoped to gather evidence to support the allegations.

Kristan F. Talley