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16 insurers shaking hands to raise insurance premiums
The Competition Administration Department (CAD) under the Ministry of Industry and Trade has decided to conduct an investigation on the case where 16 insurers signed an agreement on raising standard insurance premiums on vehicles. The CAD thinks that the agreement showed signs of violating the competition law.
Tran An Son, Deputy Head of the CAD told the local newspaper VnExpress that the signing by insurance companies in an agreement to ‘ease the fierce competition among insurers’ is a sign of violation of the competition law.
Declining to reveal the investigation plan, Son affirmed that if the companies are found as violating the competition law, they will be punished in accordance with the current laws. The highest penalty level on the behaviours of restrictions of competition is 10% of total turnover of enterprises of the fiscal year just before the companies make the violations.
In early October, in an attempt to minimize risks in the context of fierce competition among insurers, 16 insurance companies, mostly domestic ones, signed an agreement on raising the insurance premiums for vehicles. The companies include Bao Viet, Petrolimex Insurance (PJICO), PetroVietnam Insurance (PVI), Samsung Vina, Global Insurance, VASS, VIA, BIDV’s Insurance (BIC), Bao Long, Bao Ngan, Bao Minh, Bao Tin, AAA, MIC, PTI, and Agribank Insurance.
In the insurance policies, signed as of early October, insurers have raised the minimum premium from 1.3% to 1.56% per year, not including 10% of VAT.
Explaining this, insurance companies said that they have been incurring heavy losses in the last few years as they, due to the fierce competition, have had to reduce the insurance premiums despite the higher costs. Therefore, the companies, after sitting together at the end of September to discuss the solutions to minimize risks, signed the agreement on raising the standard vehicle insurance premiums.
The companies said that the new premium of 1.56% per year does not exceed the premium frame stipulated by the Ministry of Finance.
VNE
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