DID ACCIDENTS HAPPEN? NORTH KOREAN INSURANCE CLAIMS QUERIED

The North Korean government has been accused of participating in insurance scams in order to generate much-needed foreign currency. A Fox News report said that the opening of North Korea’s borders to foreign claims adjusters was not, as first thought, a sign of a thawing in relations between North Korea and the outside world, but was suspected by a growing number of international insurers to be part of a government-sponsored scam to deceive overseas insurance companies. Although the report did not cite specific examples, ID Asia has reported a number of cases in past months where North Korea seemed unusually willing to allow foreigners onto its soil to check insurance claims. These included the sinking of a ferry in April, where 100 lives were said to have been lost; a train accident around the same time, apparently killing 670 people; a train derailment, also in April, where many more were said to have died, and a helicopter crash near the capital of Pyongyang, in May. In each case North Korea opened its borders to international claims adjusters and presented what company insiders have said were perfectly compiled claims, with photographic evidence, in a remarkably short period of time. However, a Korea Times report said that there was resistance from the North Korean government to the adjusters’ attempts to check up on crucial physical evidence. Michael Payton, a lawyer who specialises in insurance law, was quoted as saying by the Fox report that “the apparent involvement of the state in every detail of these claims, coupled with the impossibility of obtaining the usual corroborative facts independent of the state, makes these claims unique, in my experience”. He estimated the extent of the reinsurance claims to be as much as $150m. Since May, North Korea has apparently become a safer, but less open, place again, with no major claims being reported.