Publications
Partners
- The outgoing Competition Commissioner says the investigation into the alleged insurance cartel is advanced.
- He also says that this does not mean all the raided insurers are guilty.
- Instead, dawn raids are part of the commission's normal investigation tools.
- Get the biggest business stories emailed to you every weekday or go to the Fin24 front page.
Competition Commissioner Tembinkosi Bonakele, says the investigation into the alleged life insurance sector collusion and possible price-fixing is already "quite advanced".
Speaking at the media briefing ahead of the Competition Commission's annual policy conference, he said the dawn raids carried out last Friday at the offices of BrightRock, Discovery, FMI, Hollard, Momentum, Old Mutual Insure, PPS and Sanlam were necessary because cartels deserve no sympathy from society.
"It's important for the competition authorities to deal with cartels….It's criminal to get involved in cartel conduct. There should be as much attention given to cartels as you have in fraud cases because that's what they are," he said.
However, Bonakele added that just because raids have been conducted on premises of the eight life insurers cited in the Competition Commission's case, that doesn't mean all of them are guilty.
"Dawn raids are part of the investigation tools. But you have to understand that the fact that somebody is raided [doesn't mean they are] guilty. It's like in a criminal case; when they arrest the suspects, the suspects are not guilty. They are just being pursued by the authorities for the purposes of the investigation," he said.
The commission prefers not to give out more details about what evidence it has found – other than its initial statements that they allegedly exchanged information on the pricing of new products so that they would align their prices.
READ MORE | Insurers accused of sharing passcodes as they are hit by historic dawn raids
Because this is still an ongoing investigation, Bonakele also didn't want to reveal if the commission got the tip-off regarding the alleged collusion or if it picked this up from its own observations.
"It's sufficient to say we have started the investigation indeed, and the investigation is progressing well and quite advanced. How we got the tip-off, I cannot answer because that's sensitive to the investigation at the moment," he said.
Although the commission said it started its investigation in January 2021, many of the insurers said they only found out about it on the day of the raids - 25 August. Old Mutual and Sanlam have subsequently made statements about how law-abiding they are and how they have zero tolerance for any non-competitive conduct.
The commission was in one of the insurer's offices from dawn until after 22:00 last Friday. The investigators initially encountered problems with security refusing them entry. But they eventually got in around 09:00. Bonakele said this was not about forced entry or non-cooperation, though. It happens that sometimes security personnel, trying to do their job, don't always understand what the processes are.
"But all the companies that were raided cooperated," he said.
One of the people who were there during the raids said they worked till late at night to ensure that they "sweep everywhere". But they said it is not as dramatic as "dawn raids" sound. They don't come in and demand that everyone stop working and confiscate all laptops in the building. Instead, there were targeted departments within the raided insurers and there were specific people whose files and laptops had to be taken over by the investigators on the day.
This is one of the biggest dawn raids the commission has carried out in its history – and a first for the insurance industry. Interestingly, the raids happened just a few days before Bonakele was due to leave the office as the commissioner - with Wednesday, 31 August, as his last day.
But he said he has discussed many things with the new commissioner Doris Tshepe.
"Doris has been there. We've been discussing a lot of things with her. She's aware of the cases. I'm also going to be supporting her in the next three months after she takes over," said Bonakele.
