South Korean reinsurance company Korean Re was slapped with a 7.6 billion won fine (US$6.72 million) for abusing its unchallenged status in the general aviation reinsurance market for nearly two decades, the Korean Fair Trade Commission (KFTC) announced Monday, December 17.
The KFTC found the reinsurer has been exploiting its market-controlling power to monopolize the market and bar potential rivals from entering the market since April 1999.
Following this, Korean Re signed an agreement with all non-life insurers in the nation’s general aviation reinsurance market, forcing them to apply its rating system when those insurers underwrite insurance policies and cede all of their reinsurance contracts to Korean Re, the KFTC stated.
Aviation insurance involves huge payments and risks, thus most of non-life insurers cede risks and responsibility to compensate reinsurers, which in this case is Korean Re.
Currently, 380 small airplanes and rescue helicopters are registered for general aviation, which contrasts with commercial aviation. Those are insured by 11 non-life insurers in Korea, worth 29 billion won (US$25.7 million) as of last year.
Full Content: Korea Times
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