Newsletter | December 2013
	Seoul High Court reverses KFTC’s order on unfair collusion case involving life insurance products
	There have been numerous administrative proceedings seeking the cancellation of the Korea Fair Trade Commission (“KFTC”)’s order against 16 life insurance providers on December 15, 2011.  KFTC issued a corrective order and administrative fines based on unfair collusive acts.  Recently, the Seoul High Court partially reversed the KFTC’s order,holding that it could not find an agreement among the insurance providers to align the expected interest rate and the official interest rate.
	The KFTC had argued that the insurance providers exchanged non-public information regarding expected interest rates, etc.  , and determined its own interest rates based on such information.  The insurance providers had, therefore, entered into an agreement to engage in a price-fixing scheme.
	The Seoul High Court found that:
	To constitute unfair collusive acts under the Monopoly Regulation and Fair Trade Law (“MRFTL”), the fact that a company merely exchanged price information with another company is not sufficient; rather, there must be an agreement to take action, such as jointly determining price.   Life insurance providers determine interest rates by taking into account not only the exchanged information, but also other factors.  The final expected interest rate, etc.  did not display a certain type of external agreement.   It is difficult to conclude that the life insurance providers had an “agreement to jointly determine the expected interest rate, etc.  ” solely from the fact that the insurance providers had determined their interest rates based on exchanged information.
	These findings indicate that the Seoul High Court accepted the life insurance providers’ argument that there was no agreement among the insurance providers to jointly determine the interest rates, but rather, the insurance providers were merely engaged in information exchange activities.  Although this case remains under review by the Supreme Court, this decision is likely to be a reference point for many other civil claims for damages filed by consumers against life insurance providers.
	Kim & Chang represented several life insurance providers in this decision and successfully argued against the KFTC’s position, and obtained a favorable judgment on behalf of the insurance providers.
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