Commercial banks are under in-depth investigation - Competition Authority: Abuse in the life insurance market for loans
The Competition Authority has launched an in-depth investigation into second-tier banks. According to the official announcement, an in-depth investigation procedure has been opened in the life insurance intermediation market for loans that require life insurance for enterprises.
A few months ago, the Competition Authority launched a preliminary investigation that included the opening of investigative procedures to avoid obstacles, restrictions, distortions of competition in the life insurance market for credit. In assessing the data obtained during the preliminary investigation phase in the life insurance market for credit, the Authority concluded that the conduct of the undertakings may constitute a violation of Article 4 of the Law on the Protection of Competition, which includes agreements, which have as their object or effect the obstacle, restriction or distortion of competition in the market, in particular agreements that determine, directly or indirectly, purchase or sale prices, or any other trading conditions, share markets or sources of supply, and others. Meanwhile, the conduct of the undertakings may also constitute a violation of Article 9 for abuse of a dominant position in the market.
For these reasons, it was decided to open an investigation procedure. The in-depth investigation covers the period from November 2021 to March 2025.
From the preliminary investigation, almost all banks are licensed as “Brokers” in insurance by the Financial Supervisory Authority. However, not all of them apply mandatory life insurance in case of borrowing. During the monitoring, it was observed that banks licensed as “Brokers” present the portfolio of insurance companies with which they have active contracts, and then allow customers to make their selection after the conditions of mediation regarding the life insurance product have been explained to them. Despite the explanation provided in writing by the second-tier banks, it turns out that the percentage of the total life insurance market according to the AFSA statistical report for 2023 is not reflected in the division of the life insurance portfolio for loans.
Given the fact that such a market share for a single product does not reflect the total division of the life insurance market, it may result from exclusionary behaviors of an anti-competitive nature, making customers not free to choose life insurance for loans from insurance companies selected by them.
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