In this issue:
- Banking sector under investigation by CCM
Banking sector under investigation by CCM
The Competition Commission of Mauritius (“CCM”) has recently received complaints that Mauritian banks are bundling insurance policies, and in doing so allegedly pressuring consumers into buying life insurance only from one company. The CCM has, accordingly, launched an investigation into the banking sector. The CCM will assess whether the banking sector is engaging in conduct that restricts, prevents or distorts competition.
Various consumer association representatives have raised concerns that the banks bundle housing loans with life insurance policies, to cover the loan repayment in the event of serious disability or death of the customer. It is alleged that customers perceive life insurance policies being forced upon them when taking out their housing loans. John Davies, Executive Director of the CCM said, “Consumer choice is the driver of competition and efficiency. Competition authorities the world over have therefore been rightly concerned when financial institutions ‘bundle’ products together, so that the customer faces no effective choice over some of the products he or she needs.”
In terms of the recently signed Memorandum of Understanding between the two organisations, the CCM has informed the Bank of Mauritius (regulator of the banking sector) of its investigation. This will be the seventh investigation by the CCM since November last year.