[Accountability Structure Dilemma] ⑤ Insurance Industry Recruiting Former Bureaucrats... Savings Banks Face Heavy Burden for Business Normalization

Insurance Companies with Over 5 Trillion Won in Assets to Implement in July
Recruitment of Outside Directors with Bureaucratic Backgrounds
Savings Banks to Begin in July 2026
Expressing Burden Amid Urgent Need for Management Normalization
Financial Authorities and Savings Banks to Draft Standard Accountability Structure Chart Together

Editor's NoteSince this year, the introduction of the 'Accountability Structure Chart' in the financial sector has heightened tension within the industry. The Accountability Structure Chart is a system where each executive of a financial company clearly defines the scope and content of their internal control responsibilities. The government established this system as a preventive measure in response to recurring financial accidents, but on the ground, there are concerns about increased responsibility and disciplinary risks. There is also a significant fear that a single small mistake could lead to losing one's position. This feature explores the background and current status of the Accountability Structure Chart's introduction and seeks improvement directions for the system to be established more efficiently and rationally.

Insurance companies with total assets exceeding 5 trillion won will implement the Accountability Structure Chart system sequentially starting from July, and savings banks will follow from July next year, depending on their asset size. Compared to financial holding companies and banks, preparations have not been adequately made, leading to expressions of burden. Large insurance companies have completed the internal control strengthening procedures but are competitively recruiting external personnel amid confusion over sanction mitigation requirements. Savings banks are undergoing restructuring due to deteriorating management, making it difficult to prepare for the Accountability Structure Chart. Accordingly, supervisory authorities are conducting preliminary inspections and management guidance targeting the secondary financial sector.

Insurance Industry Defends Risks with Former Government Officials

There are a total of 30 insurance companies with total assets exceeding 5 trillion won. Among them, 26 have submitted their Accountability Structure Charts to financial authorities. Previously, the insurance industry completed preparations for implementing the Accountability Structure Chart by revising internal governance norms through amendments to their articles of incorporation and establishing internal control committees.

A notable characteristic of the insurance industry is the recruitment of external personnel, especially a preference for former bureaucrats. Samsung Life Insurance newly appointed Professor Koo Yoon-cheol of Seoul National University as an outside director. Professor Koo is a former bureaucrat who served as the Minister for Government Policy Coordination and the 2nd Vice Minister of Strategy and Finance during the Moon Jae-in administration.

Hanwha Life Insurance appointed Lee In-sil, former Commissioner of Statistics Korea and Director of the Korea Future Population Research Institute, as an outside director, and Hanwha General Insurance brought in Yoo Kwang-yeol, former Senior Deputy Governor of the Financial Supervisory Service, as an outside director. Lotte Insurance recruited Yoon Tae-sik, former Commissioner of the Korea Customs Service and former Head of the Taxation Office at the Ministry of Strategy and Finance, and Heungkuk Fire & Marine Insurance appointed Han Seung-yeop, a professor in the Department of Business Administration at Ewha Womans University and former Financial Supervisory Service official, as outside directors.

This has been interpreted as a strategic move to strengthen communication with financial authorities regarding the implementation of the Accountability Structure Chart. Although the financial industry does not openly express it, a source of internal confusion is the sanction mitigation requirements. The financial authorities specify that "even in the event of a financial accident, if substantial care was taken and internal control management measures were implemented, responsibility can be reduced or exempted."

The Financial Supervisory Service (FSS) has stated that "substantial care" will be judged based on whether management measures were taken in a preemptive, objective, and predictable manner. The insurance industry criticized this by saying, "It sounds like the financial authorities will ultimately make the judgment." In other words, there are no regulations on the criteria for judging the fulfillment of the duty of "substantial care," nor is there a delegation basis, meaning that supervisory authorities could interpret it arbitrarily.

Researcher Yang Seung-hyun of the Korea Insurance Research Institute also pointed out, "Judging whether 'reasonable measures' have been implemented on a case-by-case basis is intended to reflect specific validity, but from the perspective of the regulated parties, it causes ambiguity regarding duty violations and sanctions."

Savings Banks Put 'Accountability Structure Chart' on the Back Burner Amid PF Restructuring Aftermath

"We need to prepare the Accountability Structure Chart. However, it is difficult to discuss specific progress at this time."

The savings bank industry will implement the Accountability Structure Chart system starting from July next year. However, they lament that they lack the capacity to prepare for it. Many are undergoing restructuring due to management crises caused by recent real estate project financing (PF) failures. Therefore, this year, the focus is more on strengthening management soundness and mergers and acquisitions (M&A) than on the Accountability Structure Chart.

Above all, there are concerns that many savings banks are small-scale and find it difficult to establish internal control inspection systems on their own. Although SBI Savings Bank, the industry's largest, has assets exceeding 15 trillion won, most others fall short of 5 trillion won. Therefore, it is estimated that many will be creating internal control IT systems for the first time this time.

Accordingly, financial authorities plan to create a task force (TF) with the Korea Federation of Savings Banks to draft a standard Accountability Structure Chart for savings banks. Fundamentally, the financial authorities will present internal control principles, and financial companies will create their own guidelines, which is the main direction of the Accountability Structure Chart.

A financial authority official explained, "Unlike banks, savings banks face difficulties from building internal control systems to expanding dedicated personnel. Once the standard is created, savings banks will proceed by making guidelines tailored to their individual circumstances."