[Power K-Women] "A Stepping Stone for the Underdog... From the First Female Deputy Director at the Financial Supervisory Service to a Private Equity Fund Dispute Resolver"

Appointed as First Female Deputy Governor of Financial Supervisory Service and Insurance Law Expert
Always Concerned About Protecting the Weaker Party... Helping Consumers in Suicide Insurance Payout Disputes Mediation

Editor's NoteAsia Economy has selected women active in various fields both domestically and internationally as 'Power K-Women' and plans to announce them through the ‘2023 Women Leaders Forum’ to be held on October 24th at the Lotte Hotel in Sogong-dong, Seoul. These women leaders have broken or transcended barriers such as gender, race, disability, and poverty to create new and universal values. Their stories will offer comfort to a weary world, serve as role models for others, and empower communities to move forward. We introduce candidates for Power K-Women every week?those who have stood up against discrimination and boundaries without shrinking back.

"Obstacles can become stepping stones." This is a phrase that Kim Eun-kyung, professor at Hankuk University of Foreign Studies Law School (former Director and Deputy Director of the Financial Consumer Protection Bureau at the Financial Supervisory Service), always keeps on her KakaoTalk profile. She described the adversities she faced in life as a 'blessing.' In 2020, while serving as a professor at Hankuk University of Foreign Studies Law School, Kim was appointed as the first female Deputy Director of the Financial Supervisory Service (FSS). She was surprisingly selected over mainstream scholars because she had lived by 'principles and conviction.' In particular, during her time as a professor, she led the Supreme Court ruling in favor of consumers in a lawsuit regarding suicide insurance payouts, which began after it was revealed that insurance companies had deliberately withheld such payments. After joining the FSS, she played the role of a troubleshooter in resolving disputes related to heritage funds. She faced various pressures during this process but emphasized that having 'principles' keeps one unshaken.

Breaking Down the Reporting Culture Barriers at the FSS

Usually fond of wearing skirts, she deliberately wore pants while working at the FSS. She said, "When I first started at the FSS, I felt a heavy sense of authority. I was cautious, worried about how my presence would be perceived as a woman at the FSS." Fortunately, her expertise was in law, and since more than half of the complaints handled by the Financial Consumer Protection Bureau were insurance-related, adapting to the work was not particularly difficult. She recalled, "However, it took time to adjust from being a free-spirited professor to a rigid organization."

Kim also changed the reporting culture at the FSS. She said, "At first, when I read reports and found something I didn’t understand, I called the investigator directly," and laughed, "When I said, 'This is Kim Eun-kyung,' the other party was silent for a long time. I guess they never expected a director to call directly." She communicated 'directly' with the report writers whenever she had questions. She explained, "Afterwards, a culture developed where the person who wrote the report would present it. Breaking down barriers sped up communication and made it more flexible. Also, giving employees the opportunity to report directly to executives instills pride and responsibility."

The 'Troubleshooter' Who Led Full Refunds of Heritage Funds

Kim was the 'troubleshooter' who led the dispute resolution for the German Heritage Fund, which caused a redemption suspension crisis nearing 500 billion KRW. In November last year, the FSS Financial Dispute Mediation Committee decided that six distributors, including Shinhan and NH Investment & Securities, must return the full principal of the Heritage Fund to customers. Kim recalled, "The moment the gavel struck three times, tears flowed endlessly."

The Heritage Fund was a product that provided bridge loans from April 2017 to December 2018 for remodeling German 'monument preservation registered buildings' into residential buildings and others. Singapore’s Banzaran Asset Management formed the loan fund, and six domestic financial firms, including Shinhan Financial Investment, issued derivative-linked securities (DLS) based on these assets, selling a total of 483.5 billion KRW.

The full refund decision was the result of the sweat and tears of Kim and FSS staff. They secured evidence that the credit status of the German developer was at risk when the Heritage Fund was sold. Kim, who studied in Germany, started by googling in German. She found official documents from the German parliament just by googling. Showing the documents to a reporter, she said, "When I found this, I really shouted 'Hooray!'"

Kim and the FSS staff used this document as a starting point and gradually unraveled clues through articles in German economic newspapers, Zoom meetings with a bankruptcy trustee who is a professor at Bremen University, and even contacted a UK consumer organization that was suing Germany to obtain materials. They then sent emails one by one to financial authorities in Germany, the UK, Singapore, and other countries, approaching the issue in a salami-slicing manner. She said, "During this process, we discovered that one of the companies involved in the Heritage Fund dispute repeatedly requested financial statements from the German developer every two months, yet despite not receiving the documents, sold an additional 100 billion KRW. This was a breach of fiduciary duty."

Professor Eun-Kyung Kim of the Graduate School of Law at Hankuk University of Foreign Studies, former Director (Vice President) of the Financial Consumer Protection Department at the Financial Supervisory Service. Photo by Younghan Heo younghan@

"Always Thinking About Ways to Protect the Vulnerable"

Before joining the FSS, Kim had lived as a self-proclaimed 'stepping stone for the vulnerable.' When she was in middle school, her father, who was a teacher, became a violator of Emergency Measure No. 9. During the process of filing an invalidation lawsuit for his dismissal, a judge played a significant role in facilitating reconciliation. After the trial, it turned out the judge was an old student of her father. This experience led Kim to pursue a path in law. She said, "The vulnerable have always been important to me, and as I thought more about them, I considered ways to protect the vulnerable."

Her office is still filled with documents related to suicide insurance payout disputes. She played a major role in the Supreme Court ruling that led insurance companies to pay insurance money and delayed interest to suicide insurance riders. This dispute began because the disaster rider also contained clauses related to suicide insurance payouts. Life insurance companies argued that the inclusion was a mistake made during the drafting of terms and conditions when creating new products and that suicide could not be included as a disaster. Policyholders countered that even if the terms were wrong, it was the insurer’s fault as the drafter, so the insurance money should be paid according to the terms.

While looking for similar overseas academic papers, Kim decided to conduct an empirical survey herself. Together with her students, she went out and distributed questionnaires to 1,022 people from various social sectors. She said, "The insurance companies claimed the terms were invalid because an average consumer should know this (that the terms were wrong). What was truly meaningful was that the answers from a commercial law professor and a 78-year-old person with only elementary education were the same. The 'average consumer' was a hollow and abstract concept." She added, "I felt I had to be a stepping stone from the perspective of the vulnerable to protect them from the attitude of businesses shifting responsibility onto consumers."

"Completed Term Despite Resignation Pressure... Gained Courage to Do Anything Well"

She was also the first Director of the Financial Consumer Protection Bureau to complete her full term. Typically, when administrations change, FSS executives face 'resignation pressure.' She was able to withstand pressure to resign because she believed in finishing what she started. She said, "I wasn’t afraid because I was doing the right thing." She emphasized that job security is important for the FSS’s work. Therefore, she argued that the head should be someone from inside or who has worked at the FSS. The current FSS Governor, Lee Bok-hyun, is from the prosecution. She advised, "The downside of the FSS organization is that it thinks only within the framework and tries to find answers only within it. The head of the FSS should be based on internal members and also utilize external human resources to create synergy."

After completing her term and returning to academia, Kim said she gained confidence that she can do anything. She said, "No matter what task is assigned, I now have the confidence to do it. I thought I was just a professor, but I confirmed that I can understand and perform well in organizational work. I believe I can do anything for society within this scope going forward."

▶Who is Former Director Kim Eun-kyung?

She served as the first female Deputy Director of the Financial Supervisory Service. She graduated from Muhak Girls' High School and the Department of Law at Hankuk University of Foreign Studies, earned a master's degree from the same university’s graduate school, and received a Ph.D. in law from the University of Mannheim in Germany. She is well known as an expert in insurance law. She was actively involved in financial authorities as a member of the FSS Dispute Mediation Committee and the Sanctions Review Committee. She made remarkable achievements on the consumer side in suicide insurance payout dispute mediation and led efforts to resolve private equity fund disputes after joining the FSS. She completed her three-year term last March and is the first Director of the Financial Consumer Protection Bureau to serve a full term.