The Competition Commission says the country’s laws prohibit competitors from sharing confidential information that could manipulate insurance prices.
It was in response to a raid on the offices of eight major insurers, which are being investigated for possible price collusion.
The commission carried out searches and seizures on Thursday at the premises of eight insurance companies, including Old Mutual, Brightrock, Discovery, Hollard and Sanlam.
The companies are alleged to have conspired to fix the price of fees for investment products such as retirement annuities, life insurance, disability and funeral benefits.
Commission spokesperson Sipho Ngwema says the search and seizure operations are part of an ongoing investigation into January 2021.
The raids were carried out in Gauteng, KwaZulu-Natal and the Western Cape and will continue on Friday morning.
Ngwema says the raided insurance companies say they will cooperate fully with authorities.
“There were suspicions of price fixing or collusion. There were companies that got together, fixing prices. The allegation is that these companies shared confidential information regarding premiums, rates of risk-related products like life insurance, funeral insurance, critical illness insurance, etc.
“The allegations are that these companies come together in breach of the Competition Act and then decide among themselves how to adjust prices so that the agreed prices are then presented to consumers who then buy these products,” Ngwema adds.
Below is the full interview with Sipho Ngwem:
Carry out investigations
In a statement, Old Mutual confirmed the raid at its Mutual Park offices in Cape Town.
Old Mutual says it is committed to acting responsibly.
However, he cannot comment further at this time.
Discovery claims it only became aware of the investigation during the raid.
It says he will comply with the commission’s request for information related to its investigation.