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The Competition Commission has launched an investigation into a possible cartel involving 11 insurance companies. The investigation focuses on the insurance provided to contractors to cover site risks when starting a construction project. This insurance is considered essential to cover personal injury and property damage to third parties during construction. The 11 companies are suspected of conspiring to limit the amount of insurance available and to stop offering unlimited insurance altogether, thereby restricting competition in the industry.
According to the Competition Commission, if such collusion is found to exist, restricting the provision of insurance products would constitute a violation of Section 41 of the Competition Act 2007, which is a prohibited business practice. As a result, the companies involved could face financial sanctions equivalent to 10% of their turnover for up to five years. The investigation also includes powers to request information, conduct interviews and search premises. In addition, a raid was carried out on the premises of the Institute of Insurers of Mauritius (IAM) in June last year for allegedly facilitating the cartel.
Questioned, the organization’s secretary general Vasish Ramkhalawon, who is currently attending a conference abroad, plans to explain the entire issue when he returns home soon. Competition Commission Executive Director Deshmuk Kowlessur stressed the importance of the insurance product for public procurement projects and pointed out that the launch of the investigation does not mean that the companies are guilty.
In addition, according to the procedure, once the investigation is completed, the Executive Director will submit a report to the Committee on the next course of action. This will determine whether there have been violations and, if so, recommend solutions and impose financial sanctions.
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