Discovery, Sanlam and other insurers raided over alleged price fixing and collusion

 ·25 Aug 2022

The Competition Commission is conducting search and seizure operations at the premises of eight insurance companies South Africa over allegations of collusion and price fixing.

The commission said it has reasonable grounds to suspect that the insurers 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.

Namely, the products are in the life insurance cover – such as dread disease cover / chronic medical condition cover – disability cover, life cover and funeral assistance benefits.

The companies raided include:

  • 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)

“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,” it said.

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. During the search, the commission said it will seize documents and electronic data, which will be analysed together with other information gathered to determine whether these firms have contravened the Competition Act.

In terms of section 48 of the Act, the commission is authorised to enter and search premises and seize documents that have a bearing on its investigation. The commission has 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, it said.

“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.

Read: Discovery launches new investment platform that looks at how long you will live

Show comments
Subscribe to our daily newsletter