Unveiling Corruption: Allegations of Financial Mismanagement and Extortion within the Insurance Control Commission

A report by Lara al-Hachem, English adaptation by Nadine Sassine

It appears that the Insurance Control Commission itself may require oversight. In a letter addressed to the Parliamentary Economic Committee by MP Waddah al-Sadek, there is a direct accusation of financial mismanagement through inflated and unrealistic contracts, along with allegations of extortion targeting insurance companies.

One of the contracts in question pertains to legal consulting, valued at $70,000 for one year. 

Additionally, Sadek obtained information revealing further controversial agreements. These include a contract with an internal auditor for the Insurance Control Commission's accounts, amounting to over $200,000, and another deal with an auditor for $420,000, specifically to review profits made by insurance companies compensating the victims of the Beirut port explosion. Furthermore, there is a contract tied to the development of the Commission’s software, with a cost surpassing $200,000.

These questionable contracts have raised concerns, and canceling them would require the minister’s signature, which has not yet been secured. However, the new head of the oversight committee has already succeeded in reducing the scope of some contracts, halting payments on one, and managing to cancel the legal consulting contract with the approval of the consulting lawyer.

Sadek’s letter also sheds light on recurrent incidents of financial extortion targeting insurance companies, which are allegedly pressured to pay in exchange for having their cases processed within the commission, with backing from influential figures in the Ministry of Economy.

The Insurance Control Commission’s role includes auditing company accounts, issuing solvency certificates, and suspending or revoking licenses when necessary. Behind the scenes, there are reports of a major insurance company being extorted to receive a solvency certificate, while another company faced threats of license revocation unless payments were made.

In addition, it is important to note that Judge Samir Akiki, head of the Beirut Criminal Court, had previously called for the prosecution of an unofficial advisor to the Caretaker Minister of Economy, Amin Salam, known as F.T. The judge also referred the case to the Financial Prosecutor’s Office to take appropriate action against three individuals, including the minister’s brother. This was based on allegations that the minister’s brother had extorted an insurance company in exchange for bribes.

Despite attempts by LBCI to contact both the minister and his brother, no response was received. This case remains in the hands of the judiciary while also being scrutinized by the Parliamentary Economic Committee, which is pushing for reform within the commission following the appointment of an interim president. The true outcome of these efforts will ultimately be revealed through the results achieved.