|
|
|
|
|
|
|
Newsletter | August 2014, Issue 3
|
|
|
|
|
|
|
|
|
|
|
ANTITRUST & COMPETITION
|
|
|
|
|
Court Decision on Collusion Case Regarding Compensation for Commission Rate Tied to Personal Life Insurance Products
|
|
|
|
Following the Korea Fair Trade Commission (“KFTC”)’s correction order and imposition of administrative fines on December 15, 2011 against 16 life insurance companies for their engagement in unfair concerted action (cartel), consumers that purchased the insurance policies (the “Complainants”) brought a number of civil actions against these 16 life insurance companies. On April 25, 2014, and on June 27, 2014, the Seoul Central District Court issued judgments on a number of these civil cases in favor of the life insurance companies on grounds that the aforementioned life insurance companies had not been conclusively found to have engaged in unfair concerted action.
|
|
|
|
The Complainants had argued that the life insurance companies had colluded to reduce their expected interest rates and official interest rates below the competitive interest rates. The Complainants argued that such unfair concerted actions violated the Monopoly Regulation and Fair Trade Law (“FTL”), and demanded compensation for the losses from additional insurance charges with regard to fixed-rate insurance policies and for the losses from reduced refunds and insurance amounts due to underreported preparation fund regarding floating-rate insurances.
|
|
|
|
The Seoul Central District Court specifically found that it was difficult to conclude from the evidence provided by the Complainants that the life insurance companies had engaged in an unfair concerted action. The Seoul Central District Court gave significant weight to the separate decision by the Seoul High Court in the administrative appeal action by the life insurance companies; in that decision, the Seoul High Court reversed the KFTC’s correction order and imposition of administrative fines, agreeing that the life insurance companies had not fixed prices regarding expected and publicly announced official interest rates.
|
|
|
|
Furthermore, on July 24, 2014, the Supreme Court affirmed Seoul High Court’s decision to dismiss the KFTC’s correction order and imposition of administrative fines.
|
|
|
|
Kim & Chang represented some of the life insurance businesses in both the administrative and civil cases and contributed in receiving a judgment in favor of our clients.
|
|
|
|
|
|
Back to Main Page
|
|
|
|
|
|
If you have any questions regarding this article, please contact below:
|
|
|
|
|
|
|
|
For more information, please visit our website:
|
|
|
|
|
|
|
|