14 Bulgarian Insurance Companies with Record Fine over Cartel

The Supreme Administrative Court imposed a record anti-cartel fine for Bulgaria on Tuesday. Photo by BGNES

Bulgaria's Supreme Administrative Court ruled Tuesday that 14 Bulgarian insurance companies had formed a cartel agreement.

The Court imposed fines on all 14 companies, and on the Association of Bulgarian Insurers, totaling BGN 2,47 M because of their violation of the anti-cartel legislation, the Bulgarian Competition Protection Commission announced.

At the end of 2007, the Commission started a procedure with regard to the memorandum for creating common positions and taking joint actions for the obligatory car insurance.

The Commission ruled that the memorandum of the members of the Insurers' Association aimed at setting up a minimum premium for car insurance with all companies, and a maximum commission fees for the intermediaries.

The competition watchdog declared that any agreements between companies to fix prices and other trading condition were among the gravest violations of the competition legislation, which meant they were illegal per se even if they had not had an effect on the market yet.

Tuesday's ruling of the Supreme Administrative Court confirms the Commission's position, and cannot be appealed.

The Chair of the Insurers' Association, Orlin Penev, pointed out that the Court's ruling was unjust as it did not reflect the actual situation on the insurance market; in his words, the car insurance services brought the companies a loss of BGN 100 M in 2008.

Penev believes there was no evidence of a cartel agreement in the memorandum in question, and the fines did not correspond to the actual market share of the 14 insurers.

He stressed the fact that the total fine of BGN 2,47 imposed on the insurers was the largest in the history of the Bulgarian Competition Protection Commission.

 

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