Korea Deposit Insurance Corporation Revises Deposit Insurance Premium Rates... Slight Increase in Grades 1 and 3

Notification of Differential Evaluation Results
3.1% Discount Effect Compared to Standard Insurance Premium

[Asia Economy Reporter Ki Ha-young] The Korea Deposit Insurance Corporation announced on the 14th that it has notified 299 insured financial companies of their deposit insurance premium rates for the 2019 fiscal year.

Under the Depositor Protection Act, KDIC evaluates the management and financial status of financial companies subject to deposit insurance into grades 1 to 3 and imposes premiums differentially.

As a result of the differential evaluation, the number of grade 1 and grade 3 financial companies slightly increased compared to last year. Grade 2 financial companies, which are subject to the standard premium rates (banks 0.08%, insurance and financial investment 0.15%, mutual savings banks 0.40%), numbered 209, accounting for 69.9% of the total. Although the number of financial companies increased by 11 from 198 last year, their share of the total slightly decreased from 70.7% to 69.9%.

The number of grade 1 financial companies, which have excellent management and financial status and receive a 7% discount on the standard premium rate, increased to 63 (21.1%) compared to 58 companies (20.7%) last year.

The number of grade 3 financial companies, which have relatively higher risk than other financial companies and must pay 7% more than the standard premium rate, also increased to 26 (8.7%) from 24 companies (8.6%) last year. One financial company was judged to pose a risk to consumers beyond the range of grades 1 to 3 and was applied an 'out-of-grade' premium rate (a 10% surcharge on the standard premium rate).

This evaluation was conducted on corporations among a total of 323 insured financial companies that closed their accounts as of the end of December last year. Insurance companies, financial investment companies, and savings banks are scheduled to pay their 2019 fiscal year premiums to KDIC by the end of this month, and banks by the end of next month.