Insurance execs escape axe as Korean regulator loosens penalties

Punishments rolled back due to insurers’ efforts to pay claims after regulatory crackdown

Insurance execs escape axe as Korean regulator loosens penalties

Insurance News

By Gabriel Olano

The Financial Supervisory Service (FSS), South Korea’s financial regulatory agency, has downgraded its penalties against the CEOs of two insurers that dragged their feet in complying with an order to pay claims.
Samsung Life Insurance CEO Kim Chang-soo and Hanwha Life Insurance CEO Cha Nam-gyu have had their previous “disciplinary” warnings reduced to “precautionary” level. Had these not been lightened, the two executives would have banned them from the insurance industry for three years. Kim’s tenure at Samsung Life ended in January 2017, while Cha’s term is until March 2018.

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“The Financial Supervisory Service took into consideration the companies’ efforts to settle the matter by agreeing to pay all insurance claims from suicide,” a statement from the regulator said.
The two insurers, as well as Kyobo Life Insurance, were in hot water for paying out life insurance benefits for policyholders that committed suicide. In February, the FSS ordered the suspension of some of the insurers’ operations, and it imposed fines of up to KRW890 million (US$785,000).
Kyobo Life immediately agreed to pay the claims, worth KRW67.2 billion (US$59.6 million). This allowed its CEO, Shin Chang-jae, to escape the heavier “disciplinary” penalty.
However, both Samsung and Hanwha delayed their payments, worth KRW174 billion (US$154.3 million) and KRW 91 billion (US$80.7 million), respectively, gaining the ire of the regulatory body.
The penalty rollbacks are subject to the approval of FSS governor Zhin Woong-seob, as well as the Financial Services Commission, the FSS’s superior agency.

Related stories:
Insurers give in to regulator, agree to pay suicide claims
More Korean firms violating disclosure policies, says regulator
Samsung’s boss faces arrest

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