CCI Imposes 671 Crore Penalty On Public Sector Insurers For Rigging

Competition watchdog Competition Commission of India (CCI) has found all the four Public Sector Insurance Companies guilty of evading the Anti- Competitive law, as they bid for Kerala Government’s insurance service provider  “Rashtriya Swathya Bima Yojana” for three years till FY13. CCI has imposed a total penalty of  a whopping Rs 671 crore on these companies for rigging the bidding process.

Interestingly CCI has taken this matter “suo moto” as they have received an anonymous complaint against all the 4 government insurance companies under the Competition Act, 2002. These insurance companies include National Insurance Co. Ltd., New India Assurance Co. Ltd., Oriental Insurance Co. Ltd. and United India Insurance Co. Ltd and after investigation CCI found all 4  responsible of committing the offence under the provision of Section 3 of the Act that deals with Anti-Competitive agreements and rigging. Due to this final order has been passed against these companies.

Upon investigation, CCI has found 4 companies involved in a practice that leads to manipulation of bidding process, which is totally against the provision of the act. While passing the order CCI has also fiercely reprimanded the companies. “The present case related to bid rigging in public procurement for social welfare schemes, the beneficiaries of which were BPL and poor families and as such the same was taken as an aggravating factor,” CCI noted in the order.

As per the order penalties of Rs. 162.80 crores, Rs. 251.07 crores, Rs. 100.56 crores and Rs. 156.62 crores has been imposed  on National Insurance Co. Ltd., New India Assurance Co. Ltd., Oriental Insurance Co. Ltd. and United India Insurance Co. Ltd. respectively for the impugned conduct.