December 10, 2008 / 7:00 PM / 11 years ago

Reinsurers pay North Korea claim, drop fraud case

LONDON, Dec 10 (Reuters) - A group of international reinsurers has reached a settlement with the Korea National Insurance Corporation (KNIC) over a reinsurance claim that the group had earlier said was fraudulent.

The reinsurers will pay the state-owned insurer almost all of the claim, KNICs lawyers said, which arose when a helicopter allegedly carrying a pregnant woman to hospital crashed into a Pyongyang warehouse in 2005.

“The reinsurers and their lawyers ... agreed to retract and withdraw all allegations of fraud and impropriety against KNIC,” KNIC’s lawyers said in a statement on Wednesday.

Insurer Allianz’s (ALVG.DE) lawyers confirmed that there had been a settlement, but declined to give further detail. The court could not immediately be reached for comment, though court documents confirmed details of the hearings.

The reinsurers would pay 95 percent of a 44 million euro ($56.91 million) claim, KNIC lawyers said.

Allianz also declined to comment further on the settlement, which was reached after hearings before London’s Commercial Court.

The reinsurers had refused to pay despite a North-Korean court order. They had their primary defence struck out by the High Court in August 2007, and again by the Court of Appeal in October 2007, KNIC’s lawyers said.

KNIC, which has a state monopoly for granting insurance within North Korea, was demanding payments in euros, as fixed in the reinsurance contract — a hard currency, and therefore a commodity in short supply in North Korea.

The lawsuit is one of several which North Korea is pursuing, with claims exceeding $150 million dollar according to some estimates, involving several calamities.

Editing by Elaine Hardcastle

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