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The Competition Commission of India (CCI) has imposed a total penalty of ₹ 671.05 crore on four public sector insurance companies.
National Insurance Co Ltd, New India Assurance Co Ltd, Oriental Insurance Co Ltd and United India Insurance Co Ltd have been fined for manipulating the bidding process initiated by Kerala Government for selecting insurance service provider for Rashtriya Swasthya Bima Yojna and Comprehensive Health Insurance Scheme (CHIS) for the years 2010- 11, 2011-12 and 2012-13, a CCI statement said.
Penalties of ₹162.80 crore, ₹251.07 crore, ₹100.56 crore and ₹156.62 crore were imposed on National Insurance Co Ltd, New India Assurance Co Ltd, Oriental Insurance Co Ltd and United India Insurance Co Ltd, respectively.
The Commission had received anonymous information against the four firms alleging contravention of the provisions of Section 3 of the Competition Act, which deals with anti-competitive agreements including bid rigging.
“The present case related to bid rigging in public procurement for social welfare schemes, the beneficiaries of which were BPL and poor families and as such the same was taken as an aggravating factor,” the watchdog maintained.
The probe concluded that the four companies colluded and rigged bids for the tendering process initiated by the Kerala government.
It was also alleged that they quoted higher premium rates in 2011-12 and 2012-13 in response to the immediately preceding tender.
CCI has asked the four companies to pay the penalty within two months.
PTI adds: CCI can impose a penalty of up to 10 per cent of the average three-year turnover of a company.
In cases of cartelisation, the CCI can impose upon each such cartel participant, a penalty of up to three times of its profit for each year of continuance of the anti-competitive agreement or 10 per cent of its turnover for each year of continuance of such agreement, whichever is higher.
CCI said in the present case “it is clearly borne out from the case records that the operating parties (Ops) were holding meetings prior to submission of bids in response to the tenders issued by the Government of Kerala for the implementation of RSBY and CHIS schemes”.
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