Four insurance companies found prima facie to have infringed competition law

On the basis of the preliminary results of the investigation, the Director General of the Office for Competition considers that the behaviour of Atlas Insurance PCC Limited, MAPFRE Middlesea plc, GasanMamo Insurance Limited and Elmo Insurance Ltd amounts to a prima facie infringement of articles 5(1) and 5(1)(d) of the Competition Act.

In view of the urgency due to the risk of serious and irreparable damage to competition, the Director General has imposed interim measures on Atlas Insurance PCC Limited, MAPFRE Middlesea plc, GasanMamo Insurance Limited and Elmo Insurance Ltd in the framework of an ongoing investigation into a possible infringement of the competition rules.

The measures aim at protecting the chances of non-QVR garages to remain in the market.

These interim measures do not prejudice the outcome of the proceedings on the merits in the main case.

The addressees of this decision are involved in a prima facie infringement of competition law, through the adoption of a wide anticompetitive horizontal agreement.

The principal aspect of the agreement which can be characterised as restriction of competition by object or effect consists in the four insurers deliberately coordinating their conduct to collude in a number of ways by (i) disparaging non-QVR repairers (ii) jointly introducing a star rating mechanism, (iii) applying a different payment system between claimants who choose to repair their vehicle at a QVR garage and those claimants who choose to repair their vehicle at a non-QVR garage, (iv) applying discriminatory conduct and (v) exchanging completely sensitive and strategic information on their future market conduct.

Moreover the Office found that even if there was no other form of collusion, the exchange of information between the four insurers resulted in an anticompetitive conduct, constituting an independent infringement of competition law in itself.

The Director General of the Office for Competition issued the following decision;

i)        In terms of Article 15(1) of the Competition Act there is a prima facie finding of an infringement by Atlas Insurance PCC Limited, MAPFRE Middlesea plc, GasanMamo Insurance Limited and Elmo Insurance Ltd of article 5(1) and 5(1)(d) of the Competition Act;

ii)      Imposing interim measures in view of the urgency due to the risk of serious and irreparable damage to competition in terms of Article 15(1) of the Competition Act on Atlas Insurance PCC Limited, MAPFRE Middlesea plc, GasanMamo Insurance Limited, Elmo Insurance Ltd which shall consist of the following:

a)      Requiring the said undertakings to cease and desist from making a distinction on the method of payment of repair bills, between claimants who choose a QVR repairer and claimants who choose a non-QVR repairer; and

b)      To stop circulating any leaflets or adverts of any type which disparage the non-QVR approved garages; and

c)      To send a letter to those policyholders who submitted a claim, since February 2017 onwards, informing them that no distinction in payment shall be made between those claimants who choose a QVR repairer and those who do not choose a QVR repairer;

And;

To publish a clearly visible notice on the websites of Atlas Insurance PCC Limited, MAPFRE Middlesea plc, GasanMamo Insurance Limited and Elmo Insurance Ltd stating that no distinction in payment shall be made by the four insurance companies between those claimants who choose a QVR repairer and those who choose a non-QVR repairer.

The measures are limited to six months and in terms of Article 15(2) of the Competition Act, the decision may be renewed in so far as is necessary and appropriate.

Interim measures are instrumental for competition authorities to ensure the effective enforcement of competition law. They guarantee that during the investigation, no irreparable damage is caused to competition which could no longer be resolved by the decision adopted at the conclusion of the proceedings.

The four companies have not replied to the Director General's decision.

The decision is being published in terms of Article 19(2) of the Competition Act.