Public companies may skirt insurance rules

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Public companies may skirt insurance rules

Some public corporations are providing insurance policies for their employees that are, in effect, additional income, according to documents released Sunday by Representative Shim Jae-chul of the Grand National Party.

The insurance coverage violates the Board of Audit and Inspection's guidelines that were issued in May ordering corporations to stop providing policies that are not intended to compensate for casualties.

The 13 corporations named in the documents, including the Korea Exchange Bank and the Korea Highway Corp., have spent 9.2 billion won ($7.6 million) since 1992 on premiums offered by private insurance companies.

According to the documents, Korea Telecom Solutions has since 1997 been providing 10-year policies that upon maturation would give employees 6 million won in compensation. Four other companies paid for similar policies, offering both compensation and savings by returning a lump-sum payment upon maturity.

Mr. Shim alleged that the public corporations were offering what amounts to additional income through the programs that were "meant to get around the government's attempt to cap wage increases."

He said the Small Business Corp., another public company, allegedly offered policies last year that duplicated existing policies.

The Audit Board recommended in May that insurance policies for public corporations' employees be limited to coverage that pertained strictly to job-related items. It also recommended that public corporations not buy policies offered by private insurers because they generally offered protection for both job-related items coverage and for issues unrelated to the holders' duties.

Most of the corporations named by the Audit Board's report have cited collective agreements with their workers as the reason for their continuing to offer insurance compensation.

by Kim Jung-ha

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