South Korea's financial watchdog said Friday that it is reviewing the proposed takeover of LIG Insurance, the country's No. 5 non-life insurer, by KB Financial Group.

An official from the Financial Services Commission said a final decision will likely be made before the end of next month.

"The Financial Supervisory Service is conducting a detailed review of the takeover at the request of the financial commission as KB Financial Group submitted a request to merge LIG Insurance into an affiliate," the official said, asking not to be identified, adding that the final decision must be made within two months after a request for approval is filed.

KB Financial Group has signed a deal to purchase a 19.47 percent stake in LIG Insurance for 685 billion won (US$670 million) shortly after it was named the preferred bidder in late June.

The official from the financial commission said there appeared to be no reason for the commission to reject the proposed takeover, noting that KB Financial Group had received the second-highest rating in a recent performance evaluation.

"Though we will have to see the final outcome of the ongoing review, there appears to be no problem with the takeover for now," he said, adding that a third-level grade in the evaluation would have automatically disqualified the company from taking over other firms under related regulations.

Officials from the financial holding company have said they planned to change the name of LIG to KB Insurance, which will be launched Oct. 1 following an approval of the takeover by the financial watchdog. (Yonhap)