Case Statement to the last ten (10) of more than 200 ATI Members

The Fair Competition Commission has sent out a Case Statement to more than 200 Insurance Firms, Brokers, Agents and their Executive Officers. Below is the Case Statement Notice to the Last 10 Insurers who could not be reached by phones and couriers, the same will appear in the Local Newspapers within a space of two to three days.

IN THE UNITED REPUBLIC OF TANZANIA

FAIR COMPETITION COMMISSION

AT DAR-ES-SALAAM

IN THE MATTER OF   FAIR COMPETITION COMMISSION

 COMPLAINT NO 4 of 2013

The Fair Competition Commission (FCC) would like to bring to the attention of the Respondents listed hereunder, who could neither be reached by direct delivery nor by EMS document delivery arrangements due to communication breakdown after relocating their offices to unknown locations, the following Case Statement.

Below is the list of respondents targeted by this Case Statement Notice.

Respondent	Target’s Title
The 64th Respondent	Insurance broker
The 65th Respondent	Principal officer of the 64th Respondent
The 89th Respondent	Insurance broker
The 90th Respondent	Principal officer of the 89th  Respondent
The 95th Respondent	Insurance broker
The 96th Respondent	Principal officer of the 95th   Respondent
The 215th Respondent	Insurance broker
The 216th Respondent	Principal officer of the 215th   Respondent
The 217th Respondent	Insurance broker
The 218th Respondent	Principal officer of the 217th   Respondent

AN AMENDED STATEMENT OF THE CASE

(Statement of the case was made under Rule 12(3) of the Fair Competition Commission Rules of Procedure, 2013)

1.0 INTRODUCTION

The Fair Competition Commission (herein referred to as “the Complainant” or “the FCC”) noting that the Association of Tanzania Insurers (ATI); its Chairperson  and its members, as well as the Tanzania Insurance Brokers Association (TIBA) and its Chairperson and its members (herein referred to as  “the Respondents”) have violated the provisions of Section 9 (1) (a) and 9 (2) (a) of the Fair Competition Act, No. 8 of 2003 (herein referred to as “the FCA”), do hereby, and in accordance with Section 69(2)(b) of FCA; Rule 10(1)(b); Rule 10(2)  and Rule 12(3) of the Fair Competition Commission Procedure Rules of 2013 (herein referred to as “the FCC Procedure Rules”),  institute  a Complaint against the Respondents , and submits to the Respondents  the following Statement of the Case containing  facts which  constitute the Complaint and the provisions of the law so far violated by the Respondents.

2.0 THE PARTIES

For the purpose of this Statement the parties are as hereunder:

2.1 THE COMPLAINANT

The Complainant is the FCC; an independent government entity established under Section 62 of the FCA, and its address for the purposes of correspondences is:

                               

Fair Competition Commission,

2nd Floor, Western Wing,

Ubungo Plaza Building,

P.O. Box 7883,

                                                            Dar es Salaam.

 2.2 THE RESPONDENTS

 The Respondents to this complaint are stated herein below:

1.    The 64^th Respondent is a private company registered as insurance broker in Tanzania to provide insurance services, and is also a member of the 23^rd  Respondent its address for the purpose of service of this complaint statement is:

Afrinsurance Brokers Limited,

P.O Box 4935,

Dar es Salaam.

2.    The 65^th  Respondent is a natural personal and a Principal Officer of the 64^th Respondent, and his address for the purpose of service of this complaint statement is:

Mr. Fares Godfrey, 

Afrinsurance Brokers Limited,

P.O Box 4935,

Dar es Salaam.

3.    The 89^th Respondent is a private company registered as insurance broker in Tanzania to provide insurance services, and is also a member of the 23^rd  Respondent, its address for the purpose of service of this complaint statement is:

Blue Insurance Services (T) Ltd,

P.O Box 21799,

Dar es Salaam.

4.    The 90^th Respondents is a natural person and a Principal Officer of the 89^th Respondent, and his addresses for the purpose of service of this complaint statement is:

Mr. Alfred Mukama,

Blue Insurance Services (T) Ltd,

P.O Box 21799,

Dar es Salaam.

5.    The 95^th Respondent is a private company registered as insurance broker in Tanzania to provide insurance services, and is also a member of the 23^rd  Respondent, its address for the purpose of service of this complaint statement is:

Chombo Insurance Brokers Ltd,

P.O Box 76856,

Dar es Salaam.

6.    The 96^th Respondents is a natural person and a Principal Officer of the 95^th Respondent, and his addresses for the purpose of service of this complaint statement is:

Mr. Joseph S. Mang’ana,

Chombo Insurance Brokers Ltd,

P.O Box 76856,

Dar es Salaam.

7.    The 215^th Respondent is a private company registered as insurance broker in Tanzania to provide insurance services, and is also a member of the 23^rd  Respondent, its address for the purpose of service of this complaint statement is:

SmartJet insurance brokers Ltd,

P.O Box 652731,

Dar es Salaam.

8.     The 216^th  Respondents is a natural person and a Principal Officer of the 215^th Respondent, and her addresses for the purpose of service of this complaint statement is:

Ms. Annavivian Rutaihwa,

SmartJet insurance brokers Ltd,

P.O Box 652731,

Dar es Salaam.

9.     The 217^th  Respondent is a private company registered as insurance broker in Tanzania to provide insurance services, and is also a member of the 23^rd  Respondent, its address for the purpose of service of this complaint statement is:

Sunrise Insurance Broker Limited,

P.O Box 38140,

Dar es Salaam.

10.The 218^th  Respondents is a natural person and a Principal Officer of the 217^th  Respondent, and her addresses for the purpose of service of this complaint statement is:

Ms. Upendo Mpyopyo,

Sunrise Insurance Broker Limited,

P.O Box 38140,

Dar es Salaam.

3.0 STATEMENT OF THE CLAIM

All the above listed Respondents, jointly and severally:

3.1         Have on the 26^th March 2013 entered  into a concerted conduct of fixing prices for the provision of motor insurance within Tanzania in contravention of the provisions of section 9 (1) (a) and S. 9 (2) (a)  of the Fair Competition Act, 2003.

3.2         and, on the basis of such infringement of the provisions of  section 9 (1) (a) and S. 9 (2) (a)  of the Fair Competition Act, 2003 all those Respondents herein above named which are corporate/legal persons are liable to pay to the Complainant, an administrative monetary penalty (AMP) of a sum of money equal to their 10% of their annual turnover as provided for in section  60 (1) of the Fair Competition Commission Act, 2003, for having contravened the provisions of section 9 (1) (a) and 9 (2) (a) of the Fair Competition Act, 2003. 

3.3         and, on the basis of such infringement of the provisions of section 9 (1) (a) and S. 9 (2) (a) of the Fair Competition Act, 2003 and in effecting of the provisions of section 60 (2) of the Fair Competition Act, 2003 all Respondents jointly and or severally be condemned to pay to any such person who can provide proof to the Commission of having suffered as a result of the infringement of the said provisions by the Respondents. 

3.4         and, on the basis of such infringement of the provisions of section 9 (1) (a) and S. 9 (2) (a) of the Fair Competition Act, 2003  and in effecting of the provisions of section 60 (3) of the Fair Competition Act, 2003 all Respondents jointly and or severally which are  natural persons be deemed guilty of that offence.

4.0 FACTS CONSTITUTING THE COMPLAINT

This claim in this proceeding is made in reliance on the following facts:

4.1         THAT, on 15^th and 22^nd February 2013, the 1st  Respondent and its members, while fully aware of the fact that they are competitors in the market for the provision of motor insurance services, convened and participated in meetings aimed at  fixing premium rates for different classes of  the motor vehicle insurance.

4.2         THAT, in such meetings the 1^st Respondent and its members did agree and approved that all members of the 1st Respondents should adopt similar premium rates for motor insurance to operate throughout the market.

4.3         THAT, on the basis of such agreement and approval, the Respondents entered into and signed, on the 26^th March 2013, a Memorandum of Understanding (MoU) as evidence of their commitment to fix premiums rates for motor insurance, a fact which amounts to a form of price fixing between competitors prohibited by S. 9 (1) (a) and S. 9 (2) (a) of the Fair Competition Act, 2003.

4.4         THAT, in compliance with such  MoU, all non-life members of the 1^st Respondent, present or otherwise, agreed to and signed the said MoU intended to fix the price charges on motor premium with full knowledge that such act was in contravention of the law, as they were competitors in business.

4.5         THAT, pursuant to what is stated in paragraph (3.4) above, all members of the 1^st Respondent, present or otherwise, agreed to control the price on the terms and condition set out in the memorandum of commitment and prescribed for penalties to be meted out against any member who might breach their commitment.

4.6         THAT, with full knowledge of the nature of the agreement entered by the members of the 1^st Respondent, on 1^st July, 2013, the  Association of Insurance Brokers (TIBA) (23^rd  Respondent) issued  a Joint Public Notice with ATI (1^st Respondent) to give effect on the agreed Motor Premium Rates Adjustment.

4.7         THAT, following the joint public notice issued jointly by the 1^st Respondent and 23^rd Respondent the members of TIBA (the 59^th Respondent to the 232 Respondent) gave and continues to give effect to the agreed Motor Premium Rates Adjustment by charging the price fixed by ATI (the 1^st Respondent and its members, (the 2^nd Respondent to 22^nd Respondent)).

4.8         THAT, on 1^st September 2013, the 1^st Respondent and the 23^rd Respondent issued a joint public notice to the public regarding the fixed premium rates for Motor Insurance, and such joint notice was approved and signed by the 24^th and the 25^th Respondent while fully aware that the joint notice in support of price fixing by competitors was contravening the law.

4.9         THAT, on 22^nd October 2013 the Complainant wrote a letter, (Ref. FCC/Complaint No.1/2013/7) to the 1^st Respondent, requiring the 1^st Respondent to avail to the Complainant, within seven days, a certified copy the MoU signed by its members on 26^th March 2013.

4.10     THAT, to date, the 1^st Respondent has failed or neglected to provide to the Complainant the certified copy of the MoU.

4.11      THAT, on the basis of the facts as set out in the above paragraphs, the Respondents have manifestly infringed the provisions of sections 9(1) (a) and (2) (a) of the Fair Competition Act, 2003.

5.0      WHEREFORE the Complainant’s prayers to the Commissioners against the Respondents are as follows:

5.1         THAT, in terms of Section 59(4) (c) of the FCA, the Commission be pleased to make an order that the MoU entered by 1^st Respondent and its members, and which the 23^rd Respondent and its members having been giving effects to its contents, is void.

5.2         THAT, the Commission, in terms of Section 60(1) of the FCA, imposes severally a penalty equal 10% of annual turnover  to the 64^th, 89^th, 95^th, 215^th and 217^th for involvement in the price fixing and giving effects thereon.

5.3         THAT the Commission, in terms of Section 60(2) of the Fair Competition Act, 2003, imposes jointly and severally against all the Respondents to pay/deposit with the Commission, a monetary value as damages to be recovered by all such persons person who can provide proof to the Commission of having suffered as a result of the infringement of the said provisions by the Respondents.

5.4         THAT the Commission, in terms of Section 60(3) of the FCA Fair Competition Act, 2003, deems all Respondents who are natural persons to be deemed guilty of the offence of infringing the provisions of  section 9 (1) (a) and S. 9 (2) (a)  of the Fair Competition Act, 2003. 

5.5         THAT, the Commission be pleased to make an order that the notice of New Motor Insurance Rates issued by the 1st and the 23^rd Respondents and signed by the 24^th and 25^th Respondents, and which became effective from 1^st September 2013, is void.

5.6         THAT, the Commission in terms of Section 58(1) and (3) of the FCA, the Commission be pleased to issue a Compliance Order against all Respondents requiring them to refrain from any future conduct that infringes of section 9 (1) (a) and S. 9 (2) (a) of the FCA.

5.7         THAT, the Commission be pleased to issue an order requiring all  Respondents  to terminate forthwith their concerted conduct of price fixing rates motor insurance as promulgated in the  Joint Public Notice with ATI (1^st Respondent) to give effect on the agreed Motor Premium Rates Adjustment. , and immediately cease from contravening the provisions of section 9 (1) (a) and 9 (2) (a) of the Fair Competition Act, 2003.

5.8         THAT, the Commission be pleased to issue a public notice severely  reprimanding the 65^th, 90^th, 96^th, 216^th and 218^th Respondents for their failure to prevent the contravention of the  provisions of S. 9 (1) (a) and S. 9 (2) (a)  the FCA.

5.9         Any other relief that the Commission may deem fit to grant.

Without Prejudice to the above:

LET ALL RESPONDENTS HEREIN TAKE NOTICE that should any of the Respondents fail to respond to this Amended Statement of the Case within 14 days after first date of publication of this Notice in Newspapers, the Complainant will consider that the failing Respondent has waived his/her right to respond to this claims and therefore the Complainant will proceed with the complaint in accordance with the provisions of the Fair Competition Procedure Rules 2013.

This Statement of Claim is Signed and issued under my hand on behalf of the Claimant at Dar-es-Salaam on this 4^th day of March 2014. 

 

          DIRECTOR OF COMPLIANCE, FAIR COMPETITION COMMISSION.

TO BE SERVED UPON:

Res. No.	Respondent name and Address	Res. No.	Res. Name and Address
64	Afrinsurance Brokers Limited, P.O Box 4935, Dar es Salaam.	96	Mr. Joseph S. Mang’ana, Chombo Insurance Brokers Ltd,          P.O Box 76856, Dar es Salaam.
65	Mr. Fares Godfrey,                    Afrinsurance Brokers Limited, P.O Box 4935, Dar es Salaam.	215	SmartJet insurance brokers Ltd, P.O Box 652731, Dar es Salaam.
89	Blue Insurance Services (T) Ltd,                          P.O Box 21799, Dar es Salaam.	216	Ms. Annavivian Rutaihwa, SmartJet insurance brokers Ltd,          P.O Box 652731, Dar es Salaam.
90	Mr. Alfred Mukama, Blue Insurance Services (T) Ltd,                          P.O Box 21799, Dar es Salaam.	217	Sunrise Insurance Broker Limited, P.O Box 38140, Dar es Salaam.
95	Chombo Insurance Brokers Ltd,          P.O Box 76856, Dar es Salaam.	218	Ms. Upendo Mpyopyo,     Sunrise Insurance Broker Limited,       P.O Box 38140, Dar es Salaam.