Jan 13, 2023

CCI Dismisses Allegations Against National Insurance Company Limited & Others

On September 13, 2022, pursuant to a complaint filed by “Dr. Supratik Sanatani and Dr. Paromita Sanatani (‘Informants’), the CCI dismissed allegations of cartelization and abuse of dominant position against certain enterprises.[1]

The Informants had levelled allegations against National Insurance Company of India Limited (‘OP-1’), New India Assurance Company Limited (‘OP-2’), United India Insurance Company Limited (‘OP-3’), Oriental Insurance Company Limited (‘OP- 4’) and Insurance Regulatory and Development Authority of India (‘OP- 5’) (collectively, referred to as the ‘OPs’)

The Informants had alleged:

  1. Cartelization/Arbitrary arrangements between the OPs: Four public sector insurance companies, viz., OP-1, OP-2, OP-3 and OP-4 (collectively) insist on following their own arrangement, called the ‘Preferred Partner Network’ (‘PPN’), where the cost of hospitalization is paid to PPN hospitals according to agreed packages and not according to the health insurance policies.
  2. Anti-competitive agreement to disallow cashless benefits: OPs have drawn up an anti-competitive agreement based upon which the cartel allegedly issued an Order to not allow cashless benefits under the terms and conditions of the insurance policy to all health insurance policy holders.
  3. Abuse of Dominant Position by the OPs: OP-1, OP-2, OP-3 and OP-4 who collectively hold a market share of approximately 46.75% in respect of non-government individual and group health insurance business have violated the provisions of Section 4 of the Competition Act by indulging in the alleged conduct.

The CCI in its analysis took a holistic view that though each insurance company is required to compete with each other (regardless of being in private or public sector). The OPs (OP-1, OP-2, OP-3 and OP-4) in the present case (being public insurers) have sought to justify their conduct of coming together to negotiate with hospitals for having a PPN.

This conduct, according to the OPs, helps lower the charges for various procedures undertaken by the hospital while providing treatment to the insured. The CCI noted that there is the advantage of standardization of cost by having uniform costs payable to various hospitals by the insurance companies thereby ensuring settlement of claims of the insured without acrimony between the insurers and the hospitals.

The CCI also took notice of the fact that the four OPs have contended that fixation of PPN tariff rates helps the insured/consumers in the form of lower costs payable to hospitals for various medical procedures undertaken, which ultimately translates to lower premium payable by such policy holders. Specifically, while addressing the allegation that PPN by the four OPs restricts the claim amount and is not commensurate with the value of the sum insured, the CCI is of the prima facie view that alleged violation of the terms and conditions contained in the insurance policy can be remedied under the appropriate law, especially when the concept of “collective dominance of the OPs is alien to Indian competition law.

From a Section 4 perspective, the CCI was of the prima facie view that examination of any conduct collectively indulged in by the entities apparently holding cumulative dominance in a particular market is outside the purview of the Competition Act and does not merit further consideration. The CCI further noted that there is competition in the field, with 21 other insurance companies offering health insurance services, besides the four OPs.

Accordingly, the CCI dismissed the complaint.


[1] Case No. 16 of 2022.




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