Prosecutors Raid 7 Insurance Companies for Bid Rigging in 'LH-Ordered Insurance Contracts'
Investigation into Other Companies Alongside 'KB Sonhae Boheom' Reported by Fair Trade Commission
Seoul Central District Prosecutors' Office, Seocho-dong, Seoul. / Photo by Seokjin Choi
View original image[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] On the 15th, the prosecution conducted a raid on seven non-life insurance companies on suspicion of collusion in the bidding for rental housing insurance contracts commissioned by Korea Land and Housing Corporation (LH).
The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Jeong-seop) sent prosecutors and investigators to the headquarters of seven insurance companies including KB Insurance, Samsung Fire & Marine Insurance, MG Non-Life Insurance, Hanwha General Insurance, Heungkuk Fire & Marine Insurance, DB Insurance, and Meritz Fire & Marine Insurance to carry out the raid.
A prosecution official stated, "We are conducting a raid on the offices of seven insurance companies in connection with the collusion case involving the LH-commissioned insurance contract bidding."
Earlier, the Korea Fair Trade Commission discovered signs of collusion among seven insurance companies and the public enterprise insurance agency Gonggieop In Consulting in the 2018 LH rental housing comprehensive property insurance and jeonse rental housing fire insurance bids. The Fair Trade Commission filed charges with the prosecution against KB Insurance, which led the collusion, Gonggieop In Consulting, the CEO of Gonggieop In Consulting, and two KB Insurance officials involved.
KB Insurance, which won the LH comprehensive property insurance and fire insurance contract in 2017, paid out over 10 billion KRW in insurance claims due to the Pohang earthquake in November of the same year. To recover these losses, it is the Fair Trade Commission's judgment that KB Insurance conspired with Gonggieop In Consulting to form the consortium KB Joint Bidding Group and succeeded in winning the 2018 LH comprehensive property insurance bid.
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The prosecution is also reportedly investigating the other insurance companies that acted as nominal bidders during the bidding process, in addition to KB Insurance, which was charged by the Fair Trade Commission.
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