Samsung Life, Mirae Asset among those punished for collusion


Twelve life insurance companies were fined a total of 365.3 billion won ($315 million) by the antitrust regulator for engaging in price-fixing.

The Fair Trade Commission unveiled the list of the companies Friday ― Samsung, Kyobo, Korea, Mirae Asset, Shinhan, Tongyang, KDB, Heungkuk, ING, AIA, Metlife and Allianz.

According to the antitrust regulator, the companies had sought to raise the burden of insurance premium charged on customers and slash insurance payments to the customers through collusion.

The practice was conducted through fixing interest rates including the “expectation interest,” which determines the level of insurance premium between 2001 and 2006.

Six big companies such as Samsung Life, Korea Life and Kyobo Life, had taken the lead in the collusion, an FTC official said.

Samsung was given the highest penalties of 157.8 billion won, followed by Kyobo with 134.2 billion won, Korea with 48.6 billion won, Allianz with 6.6 billion won. Heungkuk with 4.3 billion won and Shinhan with 3.3 billion won.

The others were Tongyang Life (2.4 billion won), AIA Life (2.3 billion won), Mirae Asset (2.1 billion won), ING Life (1.7 billion won), Metlife (1.1 billion won) and KDB Life (900 million won).

In the meantime, there is a possibility that one or more of the big three companies -- Samsung, Korea and Kyobo -- could enjoy a reduction or exemption of their fines under the under the “leniency” program.

An insurance company, which confessed collusion voluntarily, could see their penalties slashed or exempted thanks to the leniency.

There is speculation that at least one of the three firms voluntarily notified the regulator of the practice after the probe was launched.

The regulator’s sanction on the insurance industry came about four years after it took punitive action against the non-life insurance sector in 2007.

In June 2007, the FTC fined 10 non-life insurance companies 50.8 billion won for colluding in a price-fixing scheme.

The insurers had formed a cartel in 2002 to fix premiums on eight types of insurance schemes, including those covering damages caused by fire and industrial accidents, it said.

The cartel was formed as a measure to minimize losses that may have occurred through competition for lowering prices following the deregulation of insurance premiums in April 2000, according to officials.

The price-fixing scheme was operated until the FTC began its investigation in June 2006.

Samsung Fire and Marine Insurance was fined 11.9 billion won, Dongbu Insurance 10.9 billion won, LIG Insurance 8.3 billion won and Hyundai Marine and Fire Insurance 7.4 billion won for taking part in the scheme.

The other six insurers were ordered to pay fines between 800 million won and 5.4 billion won.

The watchdog said that the exposure of the scam, which had acted to prevent the deregulation of insurance premiums from serving its intended purpose of promoting competition among insurance companies, will increase the quality of services and the competitiveness of local insurers.

By Kim Yon-se (kys@heraldcorp.com)