The Competition and Consumer Protection Commission says it has concluded “legally binding commitments” with six insurers — AIG Europe, AXA Insurance, Allianz, Aviva Insurance, FBD, and AA Ireland — to agree to independent oversight of competition compliance programmes. 

However, despite a five-year probe into anti-competitive practices by the industry, the CCPC has decided not to take any company or broker to court over the ‘price signalling’ practices.

The CCPC criticised the attitude of Brokers Ireland, which counts 1,200 insurance and financial brokers as members, after it refused to be bound by those commitments. 

The CCPC said the refusal “calls into question the organisational attitude towards compliance”.

This is the third investigation the CCPC has undertaken in the sector and it has written to the Central Bank outlining concerns about the culture of the industry and the repeated interventions that have been needed to address issues in the sector.

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Enforcement commissioner Brian McHugh said: “We issued preliminary findings to seven parties in September 2020, alleging that these had engaged in anti-competitive cooperation over a 21-month period during 2015 and 2016.

“All denied that they were in breach of competition law and pointed to their existing compliance programmes and measures. However, the existence of a compliance programme is of little value unless, when tested, a business and all of its employees can demonstrate that compliance is an integral part of the culture and working practices of the company.

“The CCPC did not accept that adequate compliance measures were in place in these businesses, as robust compliance programmes would have identified and flagged the behaviours of concern that were under investigation.”

The commitments they have now entered into require each company to implement and maintain an appropriate internal competition law compliance programme, or enhance any existing programmes, to include:

• provision of an internal monitoring mechanism to detect, identify and report suspected breaches of the compliance programme
• provision of a mechanism for employees reporting suspected breaches and protection for the employee that comes forward
• appointment of a compliance officer who must report to the Board of the organisation
• regular competition law training on pricing practices and communications that are not permitted under the law
• independent expert oversight of the compliance programmes including various auditing and reporting requirements
• an annual submission to the CCPC demonstrating conformity with the commitment.

The CCPC can take legal proceedings to enforce the agreement should any party fail to comply.

On the refusal by Brokers Ireland to sign up to the new regime, McHugh added: “Brokers Ireland had a responsibility to fully address the conduct of its predecessor organisation, the Irish Brokers Association, which raised competition law concerns. By signing an equivalent agreement to that of the other six parties, Brokers Ireland would have, in the CCPC’s view demonstrated its commitment to compliance in the future.

“The fact that Brokers Ireland did not  enter into legally binding commitments, in the CCPC’s view arguably calls into question the organisational attitude towards compliance.”

Industry body Insurance Ireland said it noted the conclusion of the CCPC’s investigation and that in reaching its conclusion, the CCPC has not made findings that breaches of competition law have occurred. However, at present the CCPC does not have the power to make such a finding and will not acquire it until the Competition (Amendment) Bill 2021 passes into law later this year.

Just two months ago, EU competition regulators told Insurance Ireland that they had formed a preliminary view that it breached competition rules in the motor market, following a two-year long investigation.