The Competition Commission of India(CCI)has imposed a total penalty of ₹ 671.05 crores upon 4 Public Sector Insurance Companies for manipulating the bidding process initiated by Government of Kerala for selecting insurance service provider for Rashtriya Swasthya BimaYojna for the years 2010-11, 2011-12 and 2012-13.

The final order was passed by CCI on 10.7.15 in a matter which was taken up suo moto pursuant to an anonymous information received by the Commission under section 19(1) of the Competition Act, 2002 against National Insurance Co. Ltd., New India Assurance Co. Ltd., Oriental Insurance Co. Ltd. and United India Insurance Co. Ltd. alleging contravention of the provisions of section 3 of the Act which deals with anti-competitive agreements including bid rigging.

The Commission noted the impugned conduct of these companies to have resulted in manipulation of the bidding process in contravention of the provisions of section 3(1) read with section 3(3)(d) of the Act. While imposing penalties, the Commission noted that the present case related to bid rigging in public procurement for social welfare schemes, the beneficiaries of which were BPL and poor families and as such the same was taken as an aggravating factor.

Accordingly, penalties of ₹ 162.80 crores, ₹ 251.07 crores, ₹ 100.56 crores and ₹ 156.62 crores were imposed upon National Insurance Co. Ltd., New India Assurance Co. Ltd., Oriental Insurance Co. Ltd. and United India Insurance Co. Ltd. respectively for the impugned conduct which was found to be in contravention of the provisions of section 3(1) read with section 3(3)(d) of the Act.

The order of the Commission was passed in Suo Moto Case No. 02 of 2014 and a copy thereof has been uploaded on the website of CCI at www.cci.gov.in.

Bid rigging: penalties imposed on insurers for manipulating procurement in a social welfare insurance scheme. The Commission found four public sector insurers engaged in bid rigging constituting anti-competitive agreements in the procurement for a government health-insurance welfare scheme, treating the harm to beneficiaries as an aggravating factor; the matter arose from a suo moto inquiry and resulted in an order imposing financial penalties on each insurer and publication of the decision.