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FSS continues to focus intently on rule violations

Regulator is paying close attention to insurance practices
Feb 14,2019
The country’s financial regulator is continuing to closely monitor the activities of institutions this year and continues to take action against those failing to follow the rules.

Last week, the Financial Supervisory Service (FSS) demanded Samsung Life Insurance and Samsung Fire & Marine Insurance improve procedures related to the assessment of clients and to claims payouts.

Samsung Life Insurance, the country’s largest life insurer, stands accused of improperly evaluating the financial status of institutions for which it provides retirement services.

The FSS “requested that Samsung Life Insurance come up with an organized system where it can systematically analyze the financial state of institutions,” said a source at the FSS.

Samsung Fire & Marine Insurance was ordered to correct its practice of not informing clients of the expected date of insurance payouts in cases where the payout is delayed.

Under the law, an insurance company is required to announce a specific date if it is unable to settle claims within three days of document submission.

The move is the latest related to Samsung financial affiliates.

The FSS and Samsung Life were at odds last year over the deduction of working expenses from claims.

The financial regulator ruled in July that Samsung Life Insurance kept part of a payout as working expenses without specifically mentioning in the contract that this could be done. The regulator said the company must compensate policyholders for this lack of disclosure .

After the FSS made the determination, Samsung Life Insurance filed a suit against the client who originality claimed the overcharging. It filed a civil suit in the Seoul Central District Court asking for the nullification of the policyholder’s demand for compensation.

It is not just insurers getting extra attention from the regulator.

The FSS fined KB Kookmin Bank for poorly managing retirement pensions.

According to the regulator, the bank was ordered to pay 500 million won ($445,768) for improperly detailing the management of retirement pension.

Other charges include insufficient financial evaluation of institutions for which it manages pension money.

The FSS fined Woori Bank 70 million won earlier this month for opening bank accounts without clients’ consent.

In 2007, the Woori employee heading one of the bank’s branches in Seoul obtained a roster of street cleaners who are members of cleaners’ union. Personal information from the list was used to open 100 bank accounts.


BY PARK EUN-JEE [park.eunjee@joongang.co.kr]