Anil Rathi Vs.Oriental Insurance Company Limited - (Competition Commission of India) (10 May 2019)

When Opposite Party is not dominant in relevant market, there is no need to examine allegations of unfair trade practice

MANU/CO/0015/2019

MRTP/ Competition Laws

The present information has been filed by Mr. Anil Rathi (Informant) under Section 19(1)(a) of the Competition Act, 2002 alleging abuse of dominant position by Oriental Insurance Company Limited (OP) under Section 4 of the Act. The Informant has alleged that, the conduct of the functionaries of OP is not only deficiency in service but also the manner in which the claim of the Informant was repudiated, is a case of unfair trade practice. Furthermore, the Informant has alleged that acts of the OP reflect abuse of dominant position, under the provisions of Section 4 of the Act.

The Commission observes that, the present matter pertains to non-life/general insurance sector, wherein non-life insurance products are sold by general insurance companies, which are approved by the Insurance Regulatory and Development Authority, to sell such products.

The Commission notes that the Informant is primarily aggrieved by the manner and ground on which the insurance claim was repudiated by the OP. The Commission also notes that, the Informant has alleged that, the conduct of the OP falls foul of the provisions of Section 4 of the Act. Under the scheme of the Act, the Commission, only after having found an enterprise or a group, as the case may be, to be dominant in a relevant market, would, then, examine the impugned conduct of the entity against which allegations have been levied as to whether the same results in abuse of dominant position.

The Commission notes that the OP is engaged in selling non-life insurance products, which is a commercial activity covered under provision of services. Thus, the OP squarely falls within the definition of enterprise. The relevant market in the instant matter is the 'market for provision of fire insurance services in India'. The Commission notes that in terms of explanation (a) to Section 4 of the Act, dominant position means "a position of strength, enjoyed by an enterprise, in the relevant market, in India, which enables it to: (i) operate independently of competitive forces prevailing in the relevant market; or (ii) affect its competitors or consumers or the relevant market in its favour".

From information available in the public domain, the Commission notes that, the market for general insurance/non-life insurance is competitive with presence of about 25 general insurers and that, all these non-life insurance companies offer fire insurance policies. Furthermore, the Commission also notes that, in terms of gross premium income for non-life insurers (public sector and private sector), OP had a market share of about 9.5% in the year 2016-17, which declined to about 8.6% in 2017-18. In terms of gross premium earned from fire segment of non-life insurance, the OP enjoyed a market share of about 10.1% during 2016-17, which declined to about 8.6% during 2017-18. Thus, on the basis of market share, it can be concluded that the OP is not in a position of dominance in the relevant market delineated.

There is no material on record to show that, the OP operates independently of competitive forces prevailing in the relevant market or that it affects its competitors or consumers or the relevant market in its favour. The Commission is of the opinion that, there exists no case of contravention of the provision of Section 4 of the Act and accordingly, the matter is ordered to be closed forthwith in terms of the provisions of Section 26(2) of the Act.

Tags : DOMINANT POSITION CONTRAVENTION PROVISIONS