Cape Town - Discovery, Old Mutual, Sanlam and Momentum were just a few of the insurance companies raided by the Competition Commission on Thursday in the Western Cape, Gauteng, and KwaZulu-Natal.
Documents, electronic data and other information were seized.
The commission said they had reasonable grounds to suspect these companies engaged in collusive practices to fix prices and/or trading conditions in respect of fees for investment products such as retirement annuities and premiums for risk-related products.
This related to life insurance cover such as dread disease cover, chronic medical condition cover, disability cover, life cover and funeral assistance benefits. Other insurance companies raided were BrightRock Life Limited, the FMI division of Bidvest Life Limited, Hollard Insurance Group and Professional Provident Society.
Shares of JSE-listed firms involved in the probe all fell. If the firms are found guilty of price fixing, they can be fined 10 percent of their revenue.
Commissioner Tembinkosi Bonakele said: “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.”
Bonakele said the raids were conducted as part of an ongoing investigation initiated by the Commissioner in January 2021.
The Commission obtained warrants authorising it to search these companies from the North Gauteng High Court, KwaZulu-Natal High Court, and the Western Cape High Court.
Old Mutual spokesperson Vuyo Mtawa said: “Old Mutual can confirm that it is co-operating fully with the Competition Commission after it conducted a dawn raid this morning at our Mutual Park 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.”
Discovery said it became aware of a Competition Commission investigation into the life assurance industry yesterday morning. “We uphold all of 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 co-operate with their industry-wide investigation to the fullest extent possible,” it said.
Anneke Hanekom, head: Reputation Management, Public Relations and CSI Group Marketing at Momentum Metropolitan, confirmed that officials from the commission had visited Momentum Metropolitan’s head office in Centurion yesterday.
“We are co-operating fully with their investigation and are providing them with the required documentation relevant to their investigation. We have no reason to believe we are guilty of price fixing. We reiterate our commitment to ongoing compliance with all regulatory requirements,” she said.
Bonakele the Commission would reveal the outcome of the investigation at an appropriate stage.