site.btaCompetition Watchdog Suspects Cartel Pricing in Increase of Third-Party Liability Insurance for Taxi Drivers

The Commission on Protection of Competition (CPC) announced Wednesday that it is investigating a possible cartel pricing in an increase of the price of motor third-party liability insurance for taxi drivers.

Following a number of media statements by various stakeholders regarding the alleged coordinated increase in the premium of compulsory third party liability insurance for motorists and in particular taxi drivers, the CPC said that it is constantly monitoring and at the same time examining in detail all publicly available facts and circumstances related to the problems in this sector in recent weeks.

The Commission adds that even before the official receipt on November 19 of an alert from the non-profit association Taxi Union, as well as an alert on November 20 from the Association of Taxi Drivers - Plovdiv, the CPC has already carried out an extensive preliminary investigation, which requires the Commission to immediately find out whether a possible anti-competitive behaviour exists among participants in the insurance sector, which has the purpose or effect of preventing, restricting or distorting competition in the market. The decision to initiate proceedings will be considered at a closed meeting of the Commission on November 21 and will be published on the CPC's website.

The Commission will carry out an investigation into the reasons for the increase in civil liability insurance prices. Along with the traditional tools for conducting the study, the CPC intends to use information gathered as a result of meetings held with the relevant market participants, sector regulators, and experts in the field, the Commission noted.

On Wednesday taxi drivers in Sofia organized a protest procession. Chairman of the national taxi trade union Krasimir Tsvetkov told BTA that the cabs passed by the buildings of the Commission for Consumer Protection, the Ministry of Transport and Communications, the Association of Insurers, the Commission on Protection of Competition, the Prosecutor's Office, the National Assembly and the Council of Ministers, and ended in front of the building of the Financial Supervision Commission.

In a recent interview with BTA, Association of Bulgarian Insurers Chair Nikolay Stanchev explained that the prices of third party liability insurance are formed on the basis of the frequency of occurrence of damages and their average size. For taxi cars, the average damage is comparable to the average for all insured cars in the country, but the frequency of damage is 20 times higher and this makes the civil liability premium for them higher.