The Competition Commission says the country’s laws prohibit competitors from sharing sensitive information which could manipulate insurance prices.
This is in response to the raid at offices of eight major insurers it is investigating for possible price collusion.
The commission conducted search and seizure operations on Thursday, at the premises of eight insurance companies including Old Mutual, Brightrock, Discovery, Hollard, and Sanlam.
The companies are alleged to have colluded to fix the price of fees for investment products such as retirement annuities, life cover, disability, and funeral assistance benefits.
The Commission’s spokesperson Sipho Ngwema says the search and seizure operations are part of an ongoing investigation that was initiated in January 2021.
The raids were conducted in Gauteng, KwaZulu-Natal, and the Western Cape and will continue on Friday morning.
Ngwema says Insurance companies that were raided say they will fully cooperate with the authorities.
“There were suspicions of price fixing or collusion. There were companies coming together fixing the prices. The accusation is that these companies have shared sensitive information with regards to premiums, rates of risk related products like life covers, funeral covers and dread disease covers, etc.”
“The allegations are that these companies sit together in breach of the Competition Act and then decide amongst themselves on how to adjust prices so that the prices agreed amongst themselves are then put to consumers who then buy these products,” adds Ngwema.
Below is the full interview with Sipho Ngwema:
Comply with investigations
In a statement, Old Mutual confirmed the raid at its Mutual Park Offices in Cape Town.
Old Mutual says it is committed to acting responsibly.
However, it cannot comment further at this point.
Discovery says it only became aware of the investigation during the raid.
It says that it will comply with the commission’s request for information related to its investigation.
