In 2019, a number of pharmaceutical companies proceeded against GIC Re before the Delhi High Court to challenge the revision of reinsurance premium rates. They claimed the revisions were arbitrary and unreasonable. The Court held that GIC Re's rate revisions were within its commercial wisdom and accordingly dismissed the writ petitions. Tuli & Co acted for GIC Re in its successful defence to this action.
In 2020, Tuli & Co defended GIC Re in a complaint brought before the Competition Commission of India (CCI) by the Automotive Tyre Manufacturers Association of India (ATMA). ATMA said:
- GIC Re had enhanced reinsurance rates through implementation of certain circulars/endorsements.
- GIC Re had incorporated a Contagious Disease Exclusion.
ATMA alleged the following consequences of these steps:
- GIC Re had abused its dominant position to impose unfair and excessive pricing in terms of §4(2)(a)(ii) of the Competition Act 2002 (Act) because policyholders were being subjected to exorbitant premiums by Insurers.
- GIC Re has distinct advantages such as the right of first refusal over reinsurance placements in India coupled with a statutory cession of 5%, by which competitors are unable to operate on a level playing field and along with the end consumers are denied market access, which is violative of §4(2)(c) of the Act.
- GIC Re's exclusion of contagious disease losses was anti-competitive and violative of §3(4)(d) of the Act because it amounts to a “refusal to deal”.
- GIC Re's refusal of reinsurance support if Insurers offer discounts on the minimum premium rates amounts to “resale price maintenance” and is violative of §3(4)(e) of the Act.
- Insurers are compelled to follow GIC Re's “diktats” thereby producing a “hub and spoke” cartel which is violative of §3(3) of the Act.
GIC Re filed a detailed response denying these allegations and on 27 January 2021, the CCI dismissed ATMA's complaint, holding that:
- Allegations of GIC Re's abuse of dominant position and imposition of excessive and unfair pricing are without basis.
- GIC Re has not passed any restriction on other Reinsurers and therefore GIC Re is not in violation of §4(2)(c).
- There is no resale price maintenance since Insurers retain the commercial freedom to price their policies as they see fit.
- The Contagious Disease Exclusion endorsement builds on the pre-existing standard terms and conditions of domestic reinsurance treaties. As Insurers remain able to offer any additional cover to policyholders, there is no refusal to deal.
- Since Insurers have commercial freedom to price their policies and GIC Re has not imposed any restrictions on Insurers pricing or coverage, there is no cartel arrangement between GIC Re and Insurers.
The CCI also relied upon the Delhi High Court's order dismissing the writ petitions filed by several pharmaceutical companies against the implementation of GIC Re's circulars/endorsements.
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