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Old Mutual to pay N$6m to competition commission

2022-09-01  Staff Reporter

Old Mutual to pay N$6m to competition commission

Old Mutual Short-Term Insurance Company (Namibia) Ltd (OMSIC) has agreed to pay a total sum of N$6 million as part of two settlement agreements, after the Namibian Competition Commission (NaCC) found the insurer had contravened Section 23 of the Competition Act No.2 of 2003 in two separate investigations. 

The first investigation revealed the insurer entered into exclusive agreements with contracted windscreen retailers, which amount to limiting market access or outlets, as well as applying dissimilar conditions to equivalent transactions. An amount of N$2 200 000 was imposed on OMSIC, of which N$1 600 000 serves as a pecuniary penalty and an additional amount of N$600 000.00 for purposes of covering part of the commission’s costs arising from its investigation.

In the second investigation, the commission found OMSIC to have engaged in the setting of mark-ups panel beaters should charge for repairs of vehicles insured by OMSIC as well as the setting of maximum rates that panel beaters should charge for their labour. 

A fine of N$3 800 000 was imposed on OMSIC, apportioned as a pecuniary penalty of N$2 800 000 and an additional amount of N$1 000 000 for covering part of the commission’s costs arising from its investigation.

During January 2017 and March 2018, the NaCC initiated an investigation against Santam Namibia Ltd (Santam); Old Mutual Short-Term Insurance Company (Namibia) Ltd; Momentum Short-Term Insurance Ltd, previously known as Quanta Insurance Ltd, (Momentum); and PG Glass Namibia (Pty) Ltd (PG Glass). 

The commission found the parties entered into exclusive agreements, with windscreen retailers, which affords preferential rights, sole distribution rights, waiving of excess fees and rebate in contravention of Section 23(1) read with Sections 23(2)(b), 23(3)(e) and 23(3)(f) of the Competition Act. This matter is currently before court after the commission instituted proceedings against the respondents on 11 August 2021.

Additionally, the commission also launched an investigation, running from November 2016 to August 2019, against OMSIC; Outsurance Insurance Company (Namibia) Ltd (Outsurance); Phoenix Assurance Namibia Ltd (Phoenix); Momentum and almost 70 panel beaters for setting maximum mark-ups and labour rates that panel beaters could charge for the repair of insured vehicles. The insurance companies were found to have engaged in the conduct, which contravened the Competition Act. This matter was referred to court on 4 February 2022.

“In conclusion of the Settlement Agreements, OMSIC admitted that its conducts constituted unintended contraventions of Section 23 of the Competition Act. The commission will now embark on having the settlement agreements made orders of the High Court. The agreements, upon confirmation as an order of the High Court, shall be in full and final settlement of the investigations and the High Court proceedings as far as OMSIC is concerned. The settlement amount becomes payable upon confirmation of the settlement agreements as orders of the High Court,” read a NaCC statement. 

Old Mutual Short-Term Insurance Company (Namibia) yesterday confirmed the settlement agreements, which the company stated aims to resolve litigation in respect of the two High Court claims. 

In a statement issued yesterday, Old Mutual stated it followed all legal procedures as set out in the Competition Act and has fully cooperated with the commission throughout its investigations. 

“Due consideration having been given to the potential outcomes in these matters, OMSIC believes that settling the matters outside of court proceedings is in the best interest of all stakeholders,” Old Mutual stated.  

The short-term insurer continued that “as a responsible business, always acting in the best interest of our customers, we remain committed to ensure good governance, whilst strengthening our processes with increased focus on our customers, our environment, and communities in which we operate. OMSIC has further committed to following the subsequent procedures as set out in the Competition Act.”


2022-09-01  Staff Reporter

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