Michael Ben Yair, legal advisor to the government, has decided to
bring charges against seven major insurance company managers, in
respect of prima facie offences against the Restraint of Trade Law.
Indictments will also be brought against the companies themselves.
Ben-Yair informed the company managers of his decision at the end of
the week, also advising them that they are entitled to a preliminary
hearing, if applied for within 30 days. The investigation commenced
following disclosures by Globes in November 1992.
Ben-Yair resolved to bring charges against Uzi Levi, general manager
of Migdal insurance company; against Rimon Ben-Shaul, GM of Clal
insurance; Dr. Itamar Borowitz, GM of the Phoenix insurance company;
Shabtai Engel, GM of Menora; Rami Taiber, GM of Zion; Menahem Harpaz,
who at the relevant period was GM of Sahar; and Meir Shani, who at the
relevant period was GM of Hamagen.
Ben-Yair states, in his notice to the company managers: "After having
examined the matter and after having scrutinized it together with the
State Attorney's Office, I have decided that there are grounds for
bringing an indictment against you, in respect of offences of the
making of a cartel and of determining the modus operandi of a business
association in contravention of the restraint of trade law, in the
years 1991 and 1992, in the following insurance branches: business
premises, motor vehicles, apartments, mechanical engineering
equipment".
A senior manager in the insurance industry said: "We were especially
surprised by the fact that the proposed indictments also include price
fixing, allegedly carried out in respect of motor vehicles and
apartments. For many years now, every tariff increase and change in
those branches has been made with the approval of the Superintendent
of Insurance, and I do not understand what they want of us".