The Korea Deposit Insurance Corporation (KDIC) announced on May 23 that it will actively pursue the establishment of a bridge insurance company to protect policyholders of MG Non-Life Insurance.
To this end, the KDIC convened a Deposit Insurance Committee meeting the previous day and approved a funding plan, including an investment of 30 billion KRW. This is a follow-up measure to the Financial Services Commission's "Partial Restructuring of MG Non-Life Insurance's Operations and Future Handling Plan" announced on May 14. The 30 billion KRW represents the statutory minimum capital required under the Insurance Business Act for establishing a bridge insurance company.
In line with this, MG Non-Life Insurance also launched a task force on the same day to promote the establishment of the bridge insurance company. The KDIC plans to work in cooperation with the task force to transfer MG Non-Life Insurance's assets and liabilities to the bridge insurance company as soon as possible.
The bridge insurance company will be operated temporarily until the final transfer of contracts to the top five non-life insurers. The KDIC plans to efficiently manage the bridge insurance company by forming a joint management council with the five major non-life insurers. To this end, it has established three management principles: minimizing the operating period, joint management with the five major non-life insurers, and preventing moral hazard among stakeholders and minimizing resource waste.
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