Car insurers fined for price fixing
Print Edition
AN insurance association and 23 insurance companies in east China’s Zhejiang Province have been fined a total of 110 million yuan (US$17.9 million) for price fixing, China’s pricing regulator said yesterday.
The Insurance Association of Zhejiang initiated an alliance among insurance company branches that settled maximum discounts for vehicles and a unified commission rate for sales agencies, the National Development and Reform Commission said in a statement.
The Zhejiang insurance sector had violated China’s anti-trust law as industry associations must not organize monopoly activities and competitors must not form alliances to fix prices, it said.
The commission investigated all 32 insurers operating in the province and found that nine, including foreign invested companies Liberty Insurance and Aioi Nissay Dowa Insurance, had not taken part in the alliance or acted on any agreement.
It said the insurance association, as planner and organizer, was the main culprit.
The association was fined 500,000 yuan, the maximum amount for such violations, while the companies were ordered to pay 1 percent of their car insurance premiums for 2013.
That meant a bill of 20.70 million yuan for China Pacific Insurance Property, while Ping An Property and Casualty had to pay 15.99 million yuan, and China United Property Insurance 10.29 million yuan.
Responding to the statement, China Pacific said it had stopped acting according to the price agreement at the end of last year and was conducting an internal investigation into suspected monopoly actions over the past two years.
PICC, China Life and Ping An Insurance received lighter penalties as they voluntarily handed in important information and evidence during the investigation, the NDRC said.
The commission’s investigation, as in many similar cases, was the result of information from whistleblowers, it said.
Anti-trust investigations are widening out from manufacturing industries to services as the authority aims to tackle sectors where consumers complain the most.
Everyone is encouraged to report monopoly issues in any industry to authorities to enhance China’s anti-trust law enforcement, the NDRC statement said.
The latest decision is among a recent flurry of anti-monopoly charges involving milk powder makers, auto parts suppliers, top car brands and high technology firms such as Microsoft and Qualcomm.
Last month, the NDRC handed down record fines of 1.24 billion yuan to 12 Japanese auto parts suppliers over price fixing.
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