CCI rules out abuse of dominance by 4 insurance cos, IRDA

Competition Commission has dismissed allegations of abuse of dominance by four insurance companies, including The New India Assurance Co, and sectoral regulator IRDA.

The complaint of alleged anti-competitive practices was also filed against National Insurance Co, United India Insurance Co and Oriental Insurance Co.

In an order dated May 31, Competition Commission of India (CCI) said "no prima facie case was made out against the opposite parties under...The (Competition) Act for referring the matter to DG (Director General) for investigation".

The complainant, a policy holder with The New India Assurance, had alleged the company of abusing its dominant position by putting anti-competitive and discriminatory conditions in its policy Mediclaim 2007.

According to the complainant, the health policy Mediclaim 1996 was offered by GIC but after its demerger was taken over by The New India Assurance.

The complainant claimed the policy was withdrawn and all the policy holders were compulsorily migrated to Mediclaim 2007 and the option to stay with the old product was given to those who had completed 60 years as on September, 2007. There was allegedly no such distinction in Mediclaim 1996.

The complainant wanted CCI to direct IRDA and all public sector general insurance firms to offer options to stay with old product.

Moreover, he asked CCI to direct The New India Assurance not to exhibit co-payment/ loading conditions, among others.

In its observations, CCI noted the pleas made against IRDA were misconceived "as IRDA is a statutory sector regulator and cannot be treated as a enterprise within the meaning...Of the (Competition) Act keeping in view the nature of its activities".

CCI also noted that there were no allegations regarding "any concerted action or vertical restraints by the opposite parties either in the information or written submissions, nor the facts and circumstances suggest a concerted action on the part of opposite parties".

Citing that the insurance sector was highly fragmented with the presence of various players, CCI said "no company including opposite party 1 (The New India Assurance) can be said to be in a dominant position in the relevant market for services of non life (general/health) insurance in India".

"As such the dominance of none of the players in the relevant market was prima facie established and, therefore, the question of abuse of dominant position does not arise," it added.