The Namibian Competition Commission has fined insurance firms, Santam Namibia and Hollard Insurance Company of Namibia, N$20.5 million for alleged “unintentional” price fixing, related to vehicle repair work, in a settlement agreement.
The settlement agreement still needs to be made an order of the court before the fines will be paid over to the commission.
The commission said in a statement that it had concluded the settlement agreements with the firms in respect of an investigation relating to alleged price fixing in contravention of the Competition Act, Act 2 of 2003.
The settlement agreements are the culmination of an investigation into various vehicle insurance companies including Santam, Hollard as well as Old Mutual Short-Term Insurance Company (Namibia) Ltd (“OMSIC”), Outsurance Insurance Company of Namibia Ltd (“Outsurance”), Phoenix Namibia Assurance Company Ltd (“Phoenix”), Alexander Forbes Insurance (“Alexander Forbes”) and Momentum Short-Term Insurance Ltd (“Momentum”).
The Commission said its preliminary investigation findings were that the insurers had allegedly engaged in price fixing in contravention of the Competition Act “by coming together and setting maximum mark-ups and rates that panel beaters should charge for repairs to insured vehicles.”
The Commission said that section 40 of the Competition Act allowed it any time during or after an investigation to conclude settlement agreements with parties under investigation with a view towards resolving matters in an amicable manner.
“The Commission was approached by Santam and Hollard for settlement in terms of section 40 of the Competition Act. As part of the settlement, both Santam and Hollard have admitted to an unintended contravention of section 23 of the Competition Act,” the commission said.
“The negotiations further confirmed that Santam pay a fine of N$ 15 million, while Hollard pays a fine of N$ 5.5 million for the contravention. The two insurance companies have further committed to implement measures to mitigate the risk of future competition law violations within their respective workplaces,” the commission said.
The commission said it would continue to monitor the behaviour of the companies via regular compliance reports that they would submit to the regulator.
“In terms of section 40(3) of the Competition Act, settlement agreements have to be confirmed by Court. The Commission will accordingly and in due course submit both the Santam and Hollard settlement agreements to Court for confirmation, whereafter the fines imposed will be paid,” the commission said.
“The Commission is at the cusp of finalising its investigation against the remaining insurance companies that have not settled and will in due course make a final determination in terms of section 38 of the Competition Act in respect of whether or not it will refer the other insurance companies to court for having contravened the Competition Act,” the commission said.