Tuesday, May 24, 2022

Competition Authority probes insurers over anti-competitive conduct

Competition and Consumer Authority is investigating allegations of anti-competitive behavior against some insurance companies for cheating local panel beaters millions of pula.

The Telegraph investigations can reveal that the insurance companies in question are based in Botswana and owned by foreign investors who dominate the insurance market.

The Telegraph is in possession of documents from the Competition Authority where Botswana Insurance Company (BIC), Hollard Life Assurance Company of Botswana (Pty) Ltd and Old Mutual Life Insurance Company, amongst others, are being accused of dominance or violating Competition Authority Act and being the biggest beneficiary of the alleged looting or anti competitive conduct.

The Telegraph can reveal that a group of panel beaters across the country recently converged at the Grand Palm Hotel with a mission to petition and take insurance companies to task especially in the form of petitioning the insurance companies and also reporting them to Minister of Trade and Industry.

A group of panel beaters companies believes that the Competition Authority is taking long to address their grievances while losing millions of pula under dubious instructions from BIC, Hollard (Pty) Ltd and Old Mutual (Pty) Ltd amongst others.

The panel beaters accused BIC, Hollard amongst others of instructing them to by parts only at Auto boys (Pty) Ltd, which they believed is a brief case for BIC. (Used for alleged corruption related issues)

A group of panel beaters who spoke of anonymity for fear of losing business from insurance companies believe that Insurance companies are robbing them of millions of pula under the pretext of dominance and controlling the market.

BIC is listed under Botswana stock exchange through its mother body Botswana Insurance Holdings Limited. (BIHL)

In a letter acknowledging the complaint authored and signed by chief executive officer Competition and Consumer Authority Tebelelo Pule, wrote: “Reference is made to your complaint lodged with Competition Authority alleging unfair business conduct by Bryte Risk Services Botswana, AON Botswana (Pty) Ltd Hollard Insurance Botswana (Pty) Ltd, Old Mutual Financial Services Botswana (Pty) Ltd and Botswana Insurance Company (Pty) Ltd amongst others.

In another letter which was authored by, Director, Investigations, Policy, Research and Advocacy, Calistus Sengwatse said the statutory period for investigation to be completed is 12 months and the period of investigation in this particular matter will be elapsing on the 12th March 2020.

It is anticipated that the investigation process will be completed by then and as a result there is a need for an extension period in order for the Authority to be able to have additional time to collect and assess more information.

Almost two years running since the Competition and Consumer Authority began investigations into the alleged abuse of dominance or anti competitive conduct against certain Insurance Companies.

The Telegraph is in a possession of a letter from BIC and another from Hollard instructing some panel beaters to only buy parts at Auto Boys (Pty) Ltd.

“Kindly find attached repair order as per subject matter. Note that the parts will be delivered by Auto boys (Pty) Ltd to commence repairs and the contribution, which is to be paid by the client, is for outstanding premiums,” said Thato Mazula of BIC.

Non-Banking Financial and Regulatory Authority (NBFIRA), Botswana Insurance Company (BIC) and Competition and Consumer Authority have acknowledged receipt of The Telegraph inquiry but were not ready to respond by the time of going to press.

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