Rebate of Insurance Companies Amounts to 688.4 Billion Won Annually

The annual signing rebate that the insurance companies pay back to individuals or businesses approaches 700 billion won, which is more than 7 times the Financial Supervisory Commission`s unofficial estimate.

According to the report of Korea Institute of Finance presented to the Anti-Corruption Committee under the Prime Minister yesterday, the total rebate of the insurance companies during April 1999 through March 2000 was estimated to be 684.4 billion won.

Such amount constitutes 19.5 percent of total business operations, 3 trillion 503.4 billion won, which equals 4.5 percent of the total collection of the insurance premium, 13 trillion 914.6 billion won.

Particularly notable is the rebate for fire insurance for buildings given to building owners which recorded 24 percent.

The rebate is especially connected to the corporation business and has been a customary business activity.

The insurance companies have issued fraud bills or made false contract for purchase in order to make the rebate money.

Dr. Chung Jae-Wuk of the Korea Institute of Finance commented that "The insurance contractors do not record the rebate in their accounts, but rather misappropriate the money for personal use or a secret fund. The wrong customs of the insurance companies deepen the corruption in other business sectors."

Do-Young Kim nirvana1@donga.com