Eight insurance companies including industry giants Sanlam, Momentum and Old Mutual were raided on Thursday.
Cape Town - Eight insurance companies including industry giants Sanlam, Momentum and Old Mutual were raided on Thursday with the Competition Commission seizing documents and electronic data over the suspicion that they colluded to fix prices and/or trading conditions.
This was in respect of fees for investment products such as retirement annuity and premiums for risk-related products, namely life insurance covers such as dread disease cover/chronic medical condition cover, disability cover, life cover and funeral assistance benefits, allegedly in contravention of section 4(1)(b)(i) of the Competition Act.
The commission has set its sights on 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).
The search and seizure operations were part of an ongoing investigation that the commission initiated in January last year.
The operations were conducted at five sites in Gauteng, two in Western Cape - in Bellville and Pinelands -and one in KwaZulu-Natal.
The commission obtained warrants from the North Gauteng High Court in Pretoria, the Durban High Court, and Western Cape High Court authorising it to search the companies’ premises.
During the search, the commission said it would seize documents and electronic data, which will be analysed together with other information gathered to determine whether the firms had contravened the Act.
Competition Commission spokesperson Sipho Ngwema said information at their disposal indicated that the companies under investigation shared information on premium rates for risk-related products and fees for investment products, which enabled them to adjust the prices of their existing and new insurance products.
Competition Commissioner Tembinkosi Bonakele said: “The 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.”
Old Mutual said it was cooperating fully with the probe after the commission conducted a dawn raid on Thursday at the MutualPark Office building in Cape Town.
“Old Mutual cannot comment further at this stage. We are committed to acting responsibly while executing our business strategy and delivering great value to all our stakeholders.”
A team of investigators arrived at Sanlam’s Bellville offices on Thursday to carry out a search and seizure warrant as part of a series of raids, the company confirmed. “Sanlam Life has cooperated with the investigators and will communicate to all our relevant stakeholders as appropriate,” Sanlam said.
Discovery said it only became aware of a Competition Commission investigation into the life assurance industry on Thursday morning.
“We uphold all the principles of the Competition Act and are complying with the Commission’s request for data and information related to their investigation and will continue to cooperate with their industry-wide investigation to the fullest extent possible,” Discovery said.
Cape Times
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