Zhejiang insurers penalized for price manipulation

23 companies and industry association handed heavy fines

China's antitrust watchdog Tuesday announced combined fine of 110 million yuan ($17.8 million) on 23 property insurance companies and an insurance association in East China's Zhejiang Province, citing price manipulation.

The National Development and Reform Commission (NDRC) said in an announcement posted on its website that the Zhejiang Provincial Insurance Association convened 23 local insurers several times to fix discounts on motor vehicle insurance premiums and agreed on unified commissions for car insurance.

The association, which took primary responsibility for the violation, was fined 500,000 yuan ($81,300), said the NDRC.

An official from the NDRC, who declined to be named, confirmed the announcement with the Global Times Tuesday without giving more details.

The NDRC announcement did not reveal specific penalties imposed on each involved company. But chinanews.com reported Tuesday, citing the NDRC, that among the insurers which were fined, the Zhejiang branch of China Pacific Property Insurance Co (CPPIC) was handed the heaviest penalty of 20.7 million yuan.

Other big names to be penalized include the Zhejiang branches of Ping An Property and Casualty Insurance Company of China and China United Property Insurance Co (CUPIC), said the report.

Calls to CPPIC, Ping An and CUPIC by Global Times remained unanswered by press time.

The penalties on these domestic insurers came in the backdrop of the nation's high-profile antitrust probes into foreign firms in sectors including pharmaceuticals, technology and automobile.

In late August, the top price regulator handed down the nation's heaviest anti-monopoly fine to 12 Japanese auto parts suppliers. US software company Microsoft and chip maker Qualcomm are also under investigation for alleged monopoly behavior.

The wide-ranging antitrust probes into foreign companies have led the European Union Chamber of Commerce in China to wonder if foreign firms are being disproportionately targeted during the investigations. The American Chamber of Commerce in China has also expressed concerns over the fairness of China's recent probes, Reuters reported Tuesday.

There are increasing perceptions that overseas multinationals are under "selective and subjective enforcement" using "legal and extra-legal approaches," the US chamber was quoted by the report as saying.

But Xu Kunlin, head of NDRC's anti-monopoly bureau, said in a media interview Tuesday that though some investigations involved foreign multinationals, this did not mean the NDRC was specifically targeting foreign firms, according to Reuters.

The fines announced Tuesday were a proof that the government's antitrust investigations are being carried out impartially and transparently.

The probe into the insurers involved both foreign-invested companies as well as domestic ones, and the NDRC announcement also listed names of foreign companies which did not violate the country's antitrust laws, signifying equal treatment to foreign companies, said Huang Yong, an antitrust law professor at Beijing-based University of International Business and Economics.

According to the NDRC announcement, nine companies including Zhejiang branches of US-based Liberty Insurance Co and Japan's Aioi Nissay Dowa Insurance (China) Co were not engaged in monopolistic practices.

During a daily press briefing on Tuesday, Qin Gang, spokesman for the Ministry of Foreign Affairs, said that China's ongoing probes into foreign enterprises are "open and fair."

"This is the first time for the NDRC to post an administrative punishment decision on its website," Huang told the Global Times Tuesday, noting that China's investigations would be more transparent and fair.

Hao Yansu, dean of the School of Insurance at the Beijing-based Central University of Finance and Economics, told the Global Times Tuesday that what Zhejiang association did is a common industrial activity around the country and local authorities have handed down penalties in crackdowns on similar practices before.