South African Competition Commission Conducts Dawn Raids at Major Insurance Firms

On 25 August 2022, the South African Competition Commission (“SACC”) announced that it was conducting search and seizure operations at eight South African insurance companies as part of its ongoing investigation into the insurance market.

The eight implicated companies include the household names: Discovery Limited; Hollard Insurance Group (Pty) Ltd; Momentum, a division of MNI Limited; Old Mutual Limited; BrightRock Life Limited; FMI, a division of Bidvest Life Limited; Professional Provident Society Limited, and South African National Life Assurance Company (Pty) Ltd (together, the “Insurance Firms”).

The SACC stated that it was in possession of information implicating the Insurance Firms in a scheme to share information regarding premium rates on risk-related products and fees for other investment products leading to its decision to raid the premises of the Insurance Firms, all on the same day – emphasising the robustness and enforcement strength of the SACC. It is, however unclear whether the SACC came to be aware of such information as a result of its own investigations, or as a result of any leniency applicants.

All eight of the above firms form part of the long-term insurance market, potentially implicating them for cartel conduct in contravention of section 4(1)(b) of the Competition Act, 89 of 1998 – an offence which carries a first time penalty of 10% of contravening Firm’s annual turnover in and from South Africa.