Chilean Mining Commission to investigate insurance fraud denounced by Codelco

Codelco's Radomiro Tomic copper mine. (Image by Matt Hintsa, Flickr).

The Chilean parliament's Mining Commission announced that it will investigate allegations against an insurance company accused by Codelco of inflating policies for workers at the Radomiro Tomic y Chuquicamata copper mines.

Last week, Codelco filed a complaint before Santiago's 29 Civil Court against Chilena Consolidada, a firm linked to Zurich Insurance Group, accusing it of using an intermediary called Gestiones y Servicios to blow up premiums for life and personal accident insurance and sell them to four of its unions.

In a media statement, the state-owned company said the total cost of such deals added up to $22 million between 2005 and 2018. Half of the money was paid by Codelco and half by its workers.

However and despite a couple of years of conversations between the copper giant and Chilena Consolidada to try to solve the case, the insurer said it would only recognize payments made from August 2018 onwards. The proposal prompted Codelco to go to court.

According to local media, MPs Gabriel Silber and Issa Kort said that the Mining Commission will analyze the file submitted by Codelco before the tribunal. The group will also study information provided by BHP (ASX, NYSE: BHP), which is carrying out an audit as Gestiones y Servicios works with the union of its Escondida copper mine and was previously the protagonist of a controversial suit over a dental insurance coverage that did not comply with existing regulations and agreements.