Unsatisfactory outcome from motor insurance investigation

Following years of lobbying from Irish competition officials for powers to impose administrative sanctions in cases of anticompetitive behaviour, the Government finally came out last month with its Competition (Amendment) Bill 2022, which proposes maximum fines of up to €10 million or 10 per cent of total worldwide turnover, whichever is the greater, for wrongdoing.

Not that it had much choice. As the Bill merely transposes new European Union legislation requiring that national authorities have the ability to impose financial sanctions.

And if any case underlines the need for such a regime, it’s the Competition and Consumer Protection Commission’s (CCPC) long-running investigation into suspected price signalling by motor insurers between 2015 and 2016 that ended last year with a suboptimal outcome.

The CCPC announced in September 2020 that it had "reasonable grounds" to suspect that insurers Axa, Aviva, AIG Ireland, Allianz and FBD, insurance intermediary AA Ireland and trade body Brokers Ireland had broken anti-trust laws during that period as price increases were signalled among parties.

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But the investigation concluded last August with the CCPC signing the four insurers and AA Ireland to legally-binding oversight that they will be good in future – without any of them admitting they had breached any laws. Brokers Ireland refused outright – with the stand-off worsening following the publication of the CCPC’s final report today.

Brokers Ireland has claimed that the CCPC “mischaracterised evidence and manipulated it to fit the case it attempted to make”. It added that the CCPC’s insistence that the trade body sign up to a legally binding competition compliance programme was all about “optics,” when it is “well aware that Brokers Ireland already has in place a robust compliance regime”.

While the CCPC had the option of going to the High Court to seek a declaration that the various parties, including Brokers Ireland, had breached competition laws during the period, it decided against this, because of costs, the fact that the alleged harm to consumers had already stopped, and the fact that it would not lead to any administrative sanctions.

But it has also left the general public with the wholly unsatisfactory outcome of a five-year investigation failing to establish, once and for all, whether there had been any wrongdoing.