Most Popular
-
1
Actor Jung Woo-sung admits to being father of model Moon Ga-bi’s child
-
2
Wealthy parents ditch Korean passports to get kids into international school
-
3
Man convicted after binge eating to avoid military service
-
4
First snow to fall in Seoul on Wednesday
-
5
Industry experts predicts tough choices as NewJeans' ultimatum nears
-
6
Final push to forge UN treaty on plastic pollution set to begin in Busan
-
7
Nvidia CEO signals Samsung’s imminent shipment of AI chips
-
8
Korea to hold own memorial for forced labor victims, boycotting Japan’s
-
9
Opposition chief acquitted of instigating perjury
-
10
Job creation lowest on record among under-30s
Four insurers suspected of having illegally increased dividends to their major shareholders
The nation’s top financial regulator said on Monday it was looking into whether life insurance companies illegally increased dividends to their major shareholders by cooking the books.
The Financial Supervisory Service said it launched month-long inspections on eight life insurers including Samsung, Korea, Mirae Asset, Tongyang, Kyobo, Shinhan, ING and IBK.
“The purpose of the probe is to find out if the insurers were given all the work from affiliated companies, if their internal regulatory systems were working, and to look for irregularities in their accounting, dividend and official interest rate decision processes,” an FSS official said.
The FSS probe is focused on checking whether the insurers increased the funds for dividend payment by shifting losses or expenses between non-participating and participating insurance products.
Under participating savings insurance policies, 90 percent of the profit goes to the policyholders, whereas under nonparticipating policies, all of it goes to the shareholders.
By raising the official interest rate to boost the sales of nonparticipating products and transferring the losses and expenses to participating products, insurers can inflate the earnings from nonparticipating products on the books.
“If the earnings from participating products were turned into earnings from nonparticipating products, that means the money that should have gone to policyholders was paid to shareholders instead,” the FSS official said.
The FSS suspects that some life insurance companies under major conglomerates are illegally supporting the chaebol tycoons.
The largest shareholder of Samsung Life Insurance is Lee Kun-hee, chairman of Samsung Electronics, who holds a 20.76 percent stake. Samsung Everland, of which his son Lee Jay-yong is the biggest shareholder, owns the second-largest stake in Samsung Life of 19.34 percent.
The two largest shareholders of Korea Life Insurance is Hanwha Engineering & Construction (24.88 percent) and Hanwha Corp. (21.67 percent). Hanwha Corp. holds the biggest stake in Hanwha E&C, and Hanwha Group chairman Kim Seung-youn is the largest shareholder of Hanwha Corp.
Mirae Asset Capital holds a 59.67 percent stake in Mirae Asset Life Insurance, and Mirae Asset Financial Group chairman Park Hyeon-joo is the largest shareholder of Mirae Asset Capital.
The FSS plans to examine the official interest rates of the insurers’ products, their dividends, business expenses and transactions with major shareholders.
If there is a big difference between the official interest rates of participating and nonparticipating insurance products, there is a chance the insurers excessively raised the rate for nonparticipating products to attract subscribers and passed over the losses to participating products to inflate earnings of major shareholders, the FSS said.
By Kim So-hyun (sophie@heraldcorp.com)
The nation’s top financial regulator said on Monday it was looking into whether life insurance companies illegally increased dividends to their major shareholders by cooking the books.
The Financial Supervisory Service said it launched month-long inspections on eight life insurers including Samsung, Korea, Mirae Asset, Tongyang, Kyobo, Shinhan, ING and IBK.
“The purpose of the probe is to find out if the insurers were given all the work from affiliated companies, if their internal regulatory systems were working, and to look for irregularities in their accounting, dividend and official interest rate decision processes,” an FSS official said.
The FSS probe is focused on checking whether the insurers increased the funds for dividend payment by shifting losses or expenses between non-participating and participating insurance products.
Under participating savings insurance policies, 90 percent of the profit goes to the policyholders, whereas under nonparticipating policies, all of it goes to the shareholders.
By raising the official interest rate to boost the sales of nonparticipating products and transferring the losses and expenses to participating products, insurers can inflate the earnings from nonparticipating products on the books.
“If the earnings from participating products were turned into earnings from nonparticipating products, that means the money that should have gone to policyholders was paid to shareholders instead,” the FSS official said.
The FSS suspects that some life insurance companies under major conglomerates are illegally supporting the chaebol tycoons.
The largest shareholder of Samsung Life Insurance is Lee Kun-hee, chairman of Samsung Electronics, who holds a 20.76 percent stake. Samsung Everland, of which his son Lee Jay-yong is the biggest shareholder, owns the second-largest stake in Samsung Life of 19.34 percent.
The two largest shareholders of Korea Life Insurance is Hanwha Engineering & Construction (24.88 percent) and Hanwha Corp. (21.67 percent). Hanwha Corp. holds the biggest stake in Hanwha E&C, and Hanwha Group chairman Kim Seung-youn is the largest shareholder of Hanwha Corp.
Mirae Asset Capital holds a 59.67 percent stake in Mirae Asset Life Insurance, and Mirae Asset Financial Group chairman Park Hyeon-joo is the largest shareholder of Mirae Asset Capital.
The FSS plans to examine the official interest rates of the insurers’ products, their dividends, business expenses and transactions with major shareholders.
If there is a big difference between the official interest rates of participating and nonparticipating insurance products, there is a chance the insurers excessively raised the rate for nonparticipating products to attract subscribers and passed over the losses to participating products to inflate earnings of major shareholders, the FSS said.
By Kim So-hyun (sophie@heraldcorp.com)
-
Articles by Korea Herald
