[2024 National Audit] Kim Byunghwan: "MG Insurance Sale Is Not a Favor to Meritz Fire & Marine... Proceeded According to Law"

Kim Byung-hwan, Chairman of the Financial Services Commission, stated regarding allegations of preferential treatment in the sale process of MG Insurance, "The process was conducted according to the procedures prescribed by law without any consideration or preferential treatment."

On the 10th, at the National Assembly's Political Affairs Committee hearing, Kim responded to Shin Jang-sik, a member of the Innovation Party, who questioned whether the sale of MG Insurance through a private contract was essentially a way to favor Meritz Fire & Marine Insurance.

Financial Services Commission Chairman Kim Byung-hwan is responding to lawmakers' questions during the National Assembly's Political Affairs Committee's audit of the Financial Services Commission and the Korea Development Bank held on the 10th. Photo by Kim Hyun-min kimhyun81@

Mid-sized non-life insurer MG Insurance had four rounds of public bidding fail since February last year and recently switched to a private contract. The private contract bidding, which closed on the 2nd, saw participation from Meritz Fire & Marine Insurance and the private equity firm Daily Partners. The market currently views Meritz Fire & Marine Insurance's acquisition as highly likely.

Rep. Shin said, "Everyone in the market says Meritz Fire & Marine Insurance will receive the private contract," adding, "Since the acquisition is through the Purchase and Assumption (P&A) method without employment succession obligations and only sound assets are acquired, there is an opportunity gain exceeding 1 trillion won." He continued, "Meritz Fire & Marine Insurance failed to win the bid in the third round due to incomplete documents, but in this private contract, the deadline was extended citing document supplementation. If the documents were not ready, they should have been disqualified. Why was the deadline extended?"

Chairman Kim replied, "The sale process was conducted according to the law, and all three rounds failed. Then it can be converted to a private contract," adding, "We inquired with all potential buyers, and about two interested parties came forward. The deadline extension was not preferential treatment for Meritz Fire & Marine Insurance but because no one submitted within the original deadline."

Rep. Shin also raised suspicions that Kwon Dae-young, Secretary General of the Financial Services Commission, was involved in the sale of MG Insurance. Regarding this, Secretary General Kwon responded, "That is groundless."