A while back I posted about the various creative fund-raising techniques the DPRK is accused of using. Michael Payton, a senior partner in Clyde & Co’s insurance practice, is homing in on another one. The Korea Times reports on the smoking gun:
The alleged fraud involves a wide variety of North Korean industrial and personal accidents where insurers have been presented with perfect government-compiled documentation of events, including deaths, along with carefully gathered photographic evidence all in a startlingly brief time.
That paperwork is coupled with a resistance to letting foreign insurance adjusters examine some of the most crucial physical evidence, except after long delays and under the state’s watchful eye, if at all, it said.
The report said growing concern in the reinsurance industry is that the property damage being claimed is vastly overstated, and the circumstances of some alleged accidents may have been altered, or that deaths for which insurance payment is claimed may have had nothing to do with the accidents.
The chief concern is that only the Stalinist regime, well-known to be brutal, unscrupulous and desperately short of foreign currency, controls the information required for the payments, it said.
“I’ve never seen anything like it before,” Michael Payton, a lawyer who represents several of the major insurers in the United Kingdom, was quoted as saying by the report. “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.”
Payton estimated that the full extent of the reinsurance claims may be up to $150 million, and U.K. insurers facing these claims have only begun to talk to each other about the potential scale of their North Korean losses.