The news known this January, referring to the companies CODELCO and its Unions and Chilean Consolidated Insurance Company, belonging to the Zurich Group, has surprised the national business and political sphere, giving a very bad signal regarding the management of their corporate governments, at the national level and by the magnitude of these two companies, with negative effects of their corporate images at the international level, in the markets in which they operate.
For the Chilean Insurer Consolidated and the Zuirch Group to which it belongs, it has brought the immediate effect of provoking a real run of Directors and General Manager, who reached the doors of the Association of Insurers, having to resign their executive positions Jose Manuel Camposano and his presidency in the Association and who belonged to a Swiss transnational insurance business group, which declares as a code of conduct an “irrefutable commitment to carry out their business in a fair way”.
The factual case is that in the contracting of the collective health insurance and personal accidents of the workers of the copper company CODELCO with Consolidated Chilena, two “agents” between the two companies and trade unions, which are not classified as insurance brokers, nor as legal and psychological services companies for the care of beneficiaries of the insurance, called G and S Limitada, whose owner partners are unknown as experts in the field in which they operate (insurance, legal services and G and S Limitada, extremely overvalued insurance premiums were established compared to similar ones in the Chilean insurance market, which would have meant a higher premium payment for the benefit of the Chilean Insurance Company Consolidated, in the order of twenty-two million dollars, from 2005 to 2019, when the higher value would have been paid by CODELCO and the Unions of Workers of the cuprera, with premiums of about 63% and 68% more expensive than policies with equal benefits and coverage Chilean market.
For those who operate in the insurance market and in the negotiation of contracts, it is known that the fixing of the premium or price of insurance and its coverage is an essential issue for the insured, beneficiaries and the insurance company, negotiation in which technical criteria are applied, statistics of accidents, valuations of goods, etc., who can and must turn to qualified professionals in the subject, to reach a fair price of premiums. That being so, it is striking that, involving two qualified companies in their business shifts with professional executives, CODELCO and Chilena Consolidated, this final result has been able to reach this final result in that for fourteen years there is one on premium or price of insurance in the order of twenty-two million dollars.
In this context, it considers that Chile has reasonable corporate regulation in respect of open public limited companies, audited by the Financial Market Commission and a reasonable organic law regulating CODELCO as a state-owned company, where there are regulatory bodies of internal control in both companies, with standards compatible with OECD-level guidelines, the key question in this case is how are the internal controls and audits of their corporate governments working when it comes to bidding contracts of great economic magnitude?, How are contracts negotiated or tendered and awarded? In particular, this case should clarify that the responsibility must lie with the members of the Chilean Consolidated Board from the interests of its shareholders and possibly at the criminal level for its main executives and for CODELCO represented by its chief executives managers in this paradolet negotiation of the personal and life accident insurance of the workers of the trading company. Are the Principal Directors and Executives and advisers of these companies and Trade Union Leaders such little people in business management and representation of foreign interests, who could not realize the existence of insurance contracts, over valued extremely in their premiums or prices, applying a minimum and due diligence?.
This case is currently being investigated in criminal headquarters by means of a complaint filed by CODELCO against those who are responsible for fraud and / or unfair corporate administration and possibly fraud of the Fisco, on the one hand and also under development in the workplace in which the coupera company has requested the dismembering of certain Union leaders and in civil headquarters, through the request for the display of documents, such as board minutes and emails from Chilean Executives Consolidated for the exercise of actions, judicial proceedings in which a legal truth must be brought regarding the magnitude and dimension and personal responsibility in these serious events, which would apparently have merit for criminal classification as crimes and which leave a very bad sign in the control and management of their corporate governments, which would not be mere “bad practices”.
The issue has a public interest dimension and therefore political interest, to the extent that CODELCO is a state-owned “all Chileans” state-owned company, a major player in public revenue, in that, if there has been property damage in this “vicious” contractual relationship of overvalued insurance in its premiums or prices in the order of twenty-two million dollars, the assets of the trading company and symbolically of all Chileans and that of the Trade Unions have been damaged. Therefore, it seems reasonable for the Executive branch to request a legal and financial audit from CODELCO, in addition to that carried out by COCHILCO who did his job in the matter in discovering the case, to measure the magnitude of the property damage and the responsibility of the corresponding Executives and Workers. But instantly, it is also a terrible sign to remain incolume and inane to these serious events, that affect the credit and reputation of the country in its state-owned company symbol CODELCO, and that in passing manifests a bad signal about the way in which coDELCO company and its Workers’ Unions are in bidding for and negotiating consumer insurance contracts, which makes the question of judgment as exercised by the executives and control of the financial company and the same with regard to its Workers’ Unions and its duty to represent the interests of its affiliated workers and to care for and increase their collective wealth.
This is not a minor issue of mere negotial misconduct, but reveals a larger problem of corporate governance, loyalty and good faith and responsibility of its Executives, in public enterprise, private enterprise and union.
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