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Comp Commission raids offices of eight major life insurers

Comp Commission raids offices of eight major life insurers
25-08-22 / Duty Editor

Comp Commission raids offices of eight major life insurers

Pretoria - The Competition Commission has today announced that it is conducting search and seizure operations at the premises of eight insurance companies operating in Gauteng, KwaZulu-Natal, and Western Cape provinces.

In a statement issued this afternoon, the Commission stated that it had reasonable grounds to suspect that BrightRock Life Limited; Discovery Limited; FMI (now Bidvest Life), 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) 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 riskrelated products, namely, life insurance cover such as dread disease cover / chronic medical condition cover, disability cover, life cover and funeral assistance benefits in contravention of section 4(1)(b)(i) of the Competition Act. 

The Commission said that according to the information at its disposal, the eight 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, said the Commission, 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. During the search, the Commission will seize documents and electronic data, which will be analysed together with other information gathered to determine whether these firms have contravened the Act. 

The companies under investigation operate within the long-term (life) insurance market, and their activities within the long-term insurance market, include the offering of investment and risk-related insurance products. The risk-related insurance products include (i) life cover; (ii) funeral cover; (iii) disability cover and (iv) dread disease cover/chronic medical condition cover. The most common form of investment-related product offered by the companies is retirement annuity which becomes payable to the insured upon retirement. Clients of these companies are natural persons as well as corporate policyholders that buy cover such as retirement funds or group life schemes on behalf of their employees.

The Commission said in terms of section 48 of the Act, it is authorised to enter and search premises and seize documents that have a bearing on its investigation. It said it had obtained warrants authorising it to search these companies from the North Gauteng (Pretoria) High Court, Kwazulu Natal (Durban) High Court, and Western Cape High Court, adding that 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,” said Commissioner Tembinkosi Bonakele. 

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