According to incomplete statistics, since the implementation of the Anti monopoly Law on August 1, 2008, the insurance industry has received 11 anti-monopoly penalties from anti-monopoly law enforcement departments at all levels, including 9 cases of monopoly agreements, 2 cases of administrative monopoly, and 9 cases of declaration of concentration of business operators have been unconditionally approved for concentration.

From the 9 cases of insurance monopoly agreements, the types of insurance involved mainly include new car insurance, auto insurance, construction project accident insurance, motorcycle insurance, etc. It is mainly the industry association or several insurance companies jointly split the insurance sales market and fixed prices through “self-discipline agreement”, “cooperation agreement”, “cooperation agreement” and other ways. Therefore, the law enforcement department recognized the insurance as a horizontal monopoly agreement and was punished. The first way of punishment is to stop the illegal act, and the second way is to impose a fine. The fine imposed on the industry association shall be determined within the statutory limit of 500000 yuan, while the fine imposed on the insurance company shall be based on 1% – 10% of the sales of the operator to be punished in the previous year; Third, there was one case of confiscation of illegal income.

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So, what is a monopoly agreement? Can monopoly agreements be exempted?

The so-called monopoly agreement refers to the agreement, decision or other cooperative actions that eliminate or restrict competition. Monopoly agreements can be divided into horizontal monopoly agreements and vertical monopoly agreements according to different agreement objects.

Horizontal monopoly agreement is reached between operators with competitive relationship. China prohibits operators with competitive relationship from reaching monopoly agreement on the following contents: (1) fixing or changing commodity prices; (2) Limiting the quantity of goods produced or sold; (3) Split the sales market or raw material market; (4) Restrict the purchase of new technologies and equipment or the development of new technologies and products; (5) Boycott transactions; (6) Other monopoly agreements recognized by the antimonopoly law enforcement agency of the State Council. At the same time, China also prohibits industry associations from organizing operators of their own industries to engage in monopoly agreements.

Vertical monopoly agreement refers to the monopoly agreement reached between the operator and the counterpart of the transaction. China prohibits operators from entering into the following monopoly agreements with trading objects: (1) fixing the price of goods resold to a third party; (2) Limit the lowest price for resale to a third party; (3) Other monopoly agreements recognized by the antimonopoly law enforcement agency of the State Council.

Of course, whether it is a horizontal monopoly agreement or a vertical monopoly agreement, if the operators have sufficient evidence to prove that the agreements reached are for technological innovation, improving product quality, reducing product costs, or helping small and medium-sized operators to improve efficiency and market competitiveness, or for the social and public interests such as energy conservation, environmental protection, disaster relief, or for the legitimate purpose of consuming significantly excess energy, And once the implementation of the agreement or the implementation results have shown that the operator’s behavior will not seriously restrict the competition in the relevant market, but also enable consumers to share the benefits arising therefrom, then in these cases, the operator can apply to the law enforcement department for exemption from punishment.

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From 9 cases in the insurance industry, the agreements reached by insurance industry associations or by insurance enterprises since their development violate one or more of the provisions of “prohibiting fixing or changing commodity prices”, “prohibiting restrictions on the production or sales of commodities” or “prohibiting the division of the sales market or raw material market”. In essence, they are all reached between operators with competitive relationships to exclude Horizontal monopoly for the purpose of restricting competition.

To sum up, although the insurance industry has become a fully competitive industry after more than 40 years of development, it is still a highly punished industry in the past in terms of anti-monopoly penalties; Under the current situation of strengthening anti-monopoly, preventing capital from disorderly expansion, and strengthening competition supervision and law enforcement in key areas, the risk of insurance operators’ violation still exists, and anti-monopoly compliance must be paid attention to as soon as possible.

Lawyer Wang Fen

Graduated from the Northwest Institute of Political Science and Law, Economic Law Department, with nearly 10 years of legal service experience, and high customer satisfaction;

Advocate that the law should serve the business, be able to go deep into the frontline of the consulting unit, and provide the consulting unit with operable and valuable services that can pre control risks;

It can independently research and develop topics and provide daily legal training for enterprises, including labor law, contract law, shareholder disputes, intellectual property rights and competition law.