Insurance firms colluded to exclude motor vehicle repairers from claims

Malta’s competition office (MCCAA) has found a “serious and irreparable damage to competition” by the island’s major insurance companies, who refused to pay for repairs on cars by unrecognised garages.

The MCCAA accused the insurers Atlas, MAPFRE Middlesea, GasanMamo and Elmo, of collusion by disparaging non-QVR (quality vehicle repairers) garages, introducing a star rating mechanism, applying a different payment system between claimants who choose to repair their vehicle at a QVR garage and those claimants who choose to repair their vehicle at a non-QVR garage, and exchanging completely sensitive and strategic information on their future market conduct.

“Even if there was no other form of collusion, the exchange of information between the four insurers resulted in an anticompetitive conduct, constituting an independent infringement of competition law in itself.”

In its investigation, the MCCAA said a panel beater who argued the insurance companies’ QVR scheme, had lost out on business after clients refrained from his services because they were insured with a certain insurance company. “Another client informed him that upon requesting MAPFRE to open a claim on her behalf, the insurance company informed her that the garage of the repairer could no longer work for the insurance company because he is not listed in their book.”

The collusion resulted in an infrigment of competition law, leading to interm measures on the four companies to protect non-QVR garages to remain in the market.

The investigation by the competition authority is still ongoing.

The companies must now cease and desist from making a distinction on the method of payment of repair bills, between claimants who choose a QVR repairer and claimants who choose a non-QVR repairer; and stop circulating any leaflets or adverts of any type which disparage the non-QVR approved garages.

They will have to send a letter to policyholders who submitted a claim, from February 2017 onwards, informing them that no distinction in payment shall be made between those claimants who choose a QVR repairer and those who do not choose a QVR repairer.

They must also publish a clearly visible notice on their websites stating that no distinction in payment shall be made by the four insurance companies between those claimants who choose a QVR repairer and those who choose a non-QVR repairer.