CCPC publishes report on private motor insurance investigation
February 8, 2022
The Competition and Consumer Protection Commission (CCPC) has today published the full report on its investigation into potential anticompetitive conduct in the private motor insurance sector. The investigation closed in August 2021 after AIG Europe S.A. Ireland Branch Office, Allianz PLC, AXA Insurance DAC, Aviva Insurance Ireland DAC, FBD Insurance PLC, and AA Ireland Limited entered into legally binding agreements with the CCPC where they committed to reform their internal competition law compliance programmes. A seventh party, Brokers Ireland (formerly the Irish Brokers Association and the Professional Insurance Brokers Association) refused to enter into similar commitments.
The report outlines the CCPC’s reasoning for opening the investigation, the behaviours which came to light and the steps taken to secure the commitments. The organisations involved denied their involvement in a breach of competition law and there was no finding of liability.
Speaking today, Brian McHugh, Member of the Commission with responsibility for Competition Enforcement and Mergers, said:
‘Competition law ensures that markets work in the interests of both consumers and businesses, driving quality, consumer choice and competitive pricing. We need to be confident that businesses are setting their prices independently, particularly for products like private motor insurance which consumers simply cannot do without. The investigation outcomes which we published last August made it clear that we required changes from the parties to address our concerns over the alleged behaviours we had identified in this investigation. We welcomed the agreement from six parties to enter into legally binding commitments to ensure much needed reforms to compliance programmes. Over the coming years, we will closely monitor the progress made by all parties in delivering these reforms. This report provides the detail of how we came to our conclusions and will be of interest to the legal community and others who follow developments in Irish competition law.
The report also notes the CCPC’s regret at Brokers Ireland’s refusal to commit to internal reforms to address the CCPC’s preliminary concerns in relation to the alleged behaviour of one of its predecessor organisations, the IBA, and the CCPC’s view that this arguably calls into question the importance the organisation puts on demonstrating compliance with competition law. Upon closing the investigation, the CCPC wrote to the Central Bank of Ireland and the Department of Finance and raised concerns about the culture in the insurance industry and in particular the ability for trade associations to exert influence in regulated markets. A copy of this report has been sent to the Central Bank and we look forward to working with them and the various bodies across Government who are progressing much needed change in this sector.
The CCPC’s powers are set to be considerably strengthened this year with the anticipated enactment of the Competition (Amendment) Bill, which was published last week. As we issue this report, we are taking the opportunity to remind businesses and trade associations across all sectors of the economy to ensure that they take steps to comply with competition law including putting in place robust compliance procedures.’
The full report on the CCPC’s investigation into potential anticompetitive conduct in the private motor insurance sector is available to read.
Notes
The CCPC opened the Private Motor Insurance investigation in 2016, following public statements made by a number of parties in the sector, which appeared to be forecasting with confidence that premiums would rise. At the time, consumers were reporting increases in their premiums and the CCPC was concerned that these statements could be considered price-signalling, which is a breach of competition law.
The investigation identified certain competition law concerns and the CCPC issued preliminary findings to seven parties in September 2020. These preliminary findings set out the CCPC’s initial view that the parties (or in the case of Brokers Ireland, its predecessor organisation, the IBA) may have engaged in conduct that potentially infringed section 4 of the 2002 Act and Article 101 TFEU in the period between January 2015 and September 2016. The organisations involved denied their involvement in a breach of competition law and there was no finding of liability.
Following a period of engagement, the CCPC secured legally binding commitments from six out of seven parties, namely: AA Ireland Limited, AIG Europe S.A. Ireland Branch Office, Allianz PLC, AXA Insurance DAC, Aviva Insurance Ireland DAC and FBD Insurance PLC. Each of the six parties agreed to implement and maintain an appropriate competition law compliance programme, or to enhance any existing programme to include regular competition law training on pricing practices. Each compliance programme is subject to independent expert oversight and each party will be required to make annual submissions to the CCPC certifying compliance with the commitments.
The CCPC’s preliminary findings identified specific alleged conduct and behaviour by the Irish Brokers Association, one of the two associations that amalgamated to form Brokers Ireland, which raised serious competition concerns. Brokers Ireland, whose membership comprises over 1,200 insurance and financial brokers, and who partner with a number of major insurers, declined to enter into legally binding commitments.
Return to News
