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Court destroys “insurance cartel” convictions. From fines of over €40 million to … absolute acquittal

Judge “highly critical” of investigation led by Competitions Authority

Santarém’s Competitions Court has today “completely annulled the insurance cartel” so famously slapped with over €54 million in fines back in 2019.

Insurance companies Lusitania and Zurich – the two that came out worst from the ‘investigation’ led by the Competitions Authority – saw their appeals against fines of almost €42 million accepted.

Say reports, “the Competitions Authority came out of this case defeated, receiving strong criticism for its conduct of the process”.

Judge Mariana Gomes Machado was particularly critical of the “confession regime” (used by other insurance companies in the frame, Tranquilidade and Fidelidade), saying this was used to lead the investigation process. Essentially, the two companies requested leniency in return for incriminating their competitors, when, in the ultimate analysis, “the court could not consider the essential of the facts proved”.

The decision today sees Lusitania and Zurich released from a six year nightmare (investigations began in 2017) squeaky clean. Four directors also fined saw their fines annulled.

The Competitions Authority opened this investigation following a complaint by Tranquilidade, explains SIC television news today .

“The companies involved in the cartel agreed with each other the amounts they presented to large corporate clients when taking on work accident, health and/ or car insurance contracts, so that the incumbent insurer would always keep the customer”, said the authority at the time.

Due to having ‘blown the whistle’ on the cartel, Tranquilidade was not taken to court, while Fidelidade and Multicare “reached an agreement, in which they acknowledged their guilt waiving judicial litigation’, says SIC.

The upshot of today’s ‘bombshell’ is that the Competitions Authority has asked for an extension of time limits in order to appeal the decision.

Zurich however has already made a statement, delighting in the fact that “based on all the evidence presented, Zurich Portugal did not enter into any kind of price fixing agreement with other insurers to the detriment of its clients”.

In a statement sent to Expresso, the company says the decision “reinforces that Zurich employees always act in accordance with the law and all market regulations, that they always honour Zurich’s principles and values, that they stand up for what is right and that they act in accordance with the highest legal, regulatory and professional standards. The decision also emphasis Zurich’s commitment to protecting client data and confidence in the way it manages and leads its business”.

No information has been released yet on what this case has cost all the various parties, and what this acquittal signifies in terms of costs to the Competitions Authority.

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