Last week, the competition watchdog made a big thing about the insurance market.
As we reported on our front page last week, the Malta Competition and Consumer Affairs Authority came down like a ton of bricks on four private insurance companies, guilty, as it saw them, for establishing a system whereby they used only quality repair outlets for insurance-funded repair jobs.
Obviously, the authority was reacting after repair shops that were not included in the scheme must have complained that the system used by these four companies was unfair in their regard.
The authority peremptorily ordered the four companies to stop making a distinction in the method of payment between claimants who used the quality vehicle repair outlets and those who did not.
The MCCAA claimed this QVR system infringes the competition rules.
The authority also ordered the companies to stop distributing leaflets or running adverts that disparaged the non-QVR outlets.
The MCCAA further added that the fact that a repair outlet was QVR-certified did not imply that one got a better service than from the non-QVR outlets.
Showing perhaps where the complaints had come from, the MCCAA further added that the non-QVR outlets were losing money on a daily basis because of what it termed as 'collusion' between the four companies.
In a statement issued later, (see pg 5) the four companies rebutted that the scheme was open to all repairers and did not forbid clients from using any repair shop they liked.
In such cases, the car owners would still recover their repair expenses once the fiscal receipts were produced.
This qualification is an important one for as everyone knows, there is a lot of black economy in this and in many other sectors and fiscal receipts can sometimes be a problem. This is why it is rather strange to find a State authority that insists on equality of treatment but not as much on fiscal probity.
Besides, as the four companies pointed out, the scheme involved regular inspections of garages by an independent and reputable company, Cesvimap, part of the MAPFRE family, renowned in Spain and elsewhere.
The insurers also noted that the scheme was non-profit making and was heavily subsidized by themselves. They were financing the major part of the expenses involved in the inspections.
They expressed the fear that the ruling would severely cripple the scheme and waste the efforts, and undoubtedly the expenses undertaken so far.
We fail to see why the authority felt it had to react in such a draconian manner following a complaint by people who could have joined in the scheme but who, for their own reasons, chose to stay out.
We all know the amount of accidents that take place on our roads and the huge sums of money involved in repairs after accidents.
We also know or have heard stories of shoddy repairs and the consequences, sometimes lethal, of half-repaired vehicles on our roads. To say nothing of the fact that most of such non-QVR work is done in the black economy.
When, a few years back, the VRT system was introduced, we all believed that the standard of cars on our roads would improve no end. There has indeed been some improvement but we still see cars being used beyond their use-by date. The QVR system, which is used in other countries, aims to put car repairing on a higher level, the next logical step.