The Competition Commission (CC) has written to insurers and retailers selling extended warranties (EWs), accusing them of forming a "complex monopoly".
In a letter which outlined the CC's propoals for the reform of the sale of extended warranties (EWs) attached to domestic electrical goods (DEGs), the CC said it believes insurers and retailers are selling EWs, "in a way which prevents, restricts or distorts competition, and that they are acting as a complex monopoly."
Nine insurers were named in the monopoly, including Allianz Cornhill; Aon Warranty; AXA Insurance; Domestic & General; Hitachi Credit Insurance; Landmark Insurance; Pinnacle; Retra Insurance Services; and Royal & Sun Alliance.
The CC supported its claim by concluding that at the point of sale of EWs, "there was no information available on alternative extended warranties."
One of its proposals for reform of the market included the introduction of a benchmark standard for EWs. A CC statement said: "A benchmark standard for EWs would be established. This could help consumers to compare prices of EWs offered by different providers with the confidence of knowing that the protection offered was broadly similar."
Other proposals include the provision of policy features to customers at point of sale and the promise of protection if an insurer fails.
