Authority fines group for underhand deals

The Competitions Authority of Kenya has imposed a penalty of Sh721,715 on the Association of Kenya Reinsurers after it was found guilty of price fixing and unfair trade practices.

This was by attempting to influence the premium for medical cover for National Intelligence officers.

The association comprises Kenya Reinsurance Corporation Ltd, African Reinsurance Corporation Ltd, East African Reinsurance Company, Zep-Re and Continental Reinsurance Ltd.

“Pursuant to the CAK’s mandate under section 31 of the Competition Act No.12 of 2010, CAK carried out investigations following a complaint lodged by the National Intelligence Service (NIS).

Through a circular dated October 2, 2013, the Association had advised its members on the minimum applicable premiums on the renewal of NIS Group Life Scheme for 2013/2014.

The authority’s investigations established that Association of Kenya Re-insurers is a trade association and its setting of price amounted to collusion.

“The association had recommended a minimum premium rate of 15 per mile (cost per thousand) to insurance companies. The setting of the premium rate by the association and the request to all the insurance companies tendering for group life cover for the period 2013/2014 to charge the fixed rate amounts to collusion.

The insurance companies are required to use an independent actuary to come up with their own individual premium rates which they file with the Insurance Regulatory Authority for approval,” the competition authority said.

The association was also compelled to provide a written undertaking to desist from any future conduct that contravenes the law.