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Newsletter | April 2015, Issue 1
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Insurance
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Seoul High Court’s Decision on cartel case concerning variable life insurance commissions
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In October and November of 2014 in two court actions brought by life insurers against the Korea Fair Trade Commission (the “KFTC”), the Seoul High Court held for the plaintiff life insurers and voided a corrective order and imposition of penalty surcharge imposed by the KFTC. The Seoul High Court stated that there was no evidence that the life insurers had formed a cartel to mutually agree upon the guaranteed minimum death benefit and the guaranteed minimum accumulation benefit.
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Prior to the litigation, the KFTC had issued corrective orders and imposed penalty surcharges in the amount of KRW 20.5 billion in total against nine (9) life insurers in March 2013, alleging that the life insurers had formed a cartel for the above commissions in connection with their variable life insurance products. Subsequently in April 2013, the KFTC referred three (3) of the nine (9) life insurers to the Seoul Prosecutor’s Office for further investigation. However, following its investigation, the Seoul Prosecutor’s Office determined that it would not indict the life insurers. The Seoul High Court decision in the administrative litigation followed.
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Kim & Chang represented four (4) of the seven (7) plaintiff life insurers and advised each of them in the course of the litigation which successfully led to the Seoul High Court’s decision voiding the KFTC’s ruling and sanctions against the life insurers. Kim & Chang also represented the plaintiff life insurers in the investigation by the Seoul Prosecutor Office’s, which resulted in in their decision not to indict.
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