FSS Disciplinary Committee Issues Institutional Warning to Samsung Life Insurance... Blow to New Business Expansion

[Asia Economy Reporter Oh Hyung-gil] The Financial Supervisory Service's Disciplinary Committee decided on the 3rd to impose a severe sanction of 'institutional warning' on Samsung Life Insurance.

The FSS announced that it held the 30th disciplinary committee meeting on the same day and made this decision. The meeting also continued from 2 p.m. until late at night.

According to the review results, Samsung Life Insurance was given an institutional warning for violations related to restrictions on transactions with major shareholders and obligations to comply with the entries in basic documents. Additionally, the FSS recommended imposing fines and penalties to the Financial Services Commission and concluded with a three-month salary reduction and reprimand for executives and employees.

The disciplinary committee explained, "We reached a conclusion through very careful and in-depth deliberations by thoroughly listening to the statements and explanations of the insurance company representatives and the inspection bureau on two occasions, as well as closely examining all relevant facts and evidence."

Although the specific agenda discussed at the disciplinary committee was not disclosed, the industry considers the 'issue of cancer insurance payments for long-term care hospitals' as the core issue. It is known that during the comprehensive inspection period, the FSS focused on the actual status of payments for cancer patients' hospitalization fees along with other matters.

Previously, the FSS had preliminarily notified Samsung Life Insurance of a severe sanction of 'institutional warning,' considering that the company might have committed 'unfair underpayment of insurance claims' by not paying hospitalization fees to cancer patients who were hospitalized and treated at long-term care hospitals.

The disciplinary committee meeting held on this day will have the sanction details finalized through the FSS chief's approval or the Financial Services Commission's resolution, depending on the target of the action. If the institutional warning is finalized, Samsung Life Insurance will be unable to enter new businesses requiring financial authorities' approval or permission for one year.