SOUTH KOREA – South Korean companies committed 185 violations in disclosure policies last year, up from the 126 cases registered in 2015, the Financial Supervisory Service (FSS) said.
Last year, the FSS imposed KRW2.2 billion (US$1.9 million) in fines to firms involved in 63 cases. Apart from imposing fines, other administrative measures taken under the Financial Investment Services and Capital Markets Act include restrictions on new securities offerings and official warnings.
According to the FSS, the rise in the number of cases could be attributed to stricter monitoring and more efficient probe system.
The regulator also said some unlisted companies failed to fully understand public offering standards, which mainly resulted in the considerable growth in the violations.
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Insurance Firms Punished
Meanwhile, the FSS has suspended some operations of insurance companies in South Korea due to their failure to released suicide insurance benefits.
The FSS has suspended some operations of Samsung Life Insurance, Hanwha Life and Kyobo Life for three months, two months, and one month, respectively, over their overdue suicide insurance benefits.
Kyobo Life received the weakest penalty because it pledged to pay out all of its overdue suicide insurance benefits.
The three insurers have been criticized for failing to pay out death claims for subscribers who committed suicide. The FSS said the chief executives of the three insurers have also received warning from the regulator.
Between 2003 and 2010, more than 10 life insurers in South Korea had sold policies for accidents that cover deaths and suicides before they changed the terms to exclude suicide.
Korean Insurers Post Income Decline
Insurance companies in South Korea saw their net income declining by 2.3% on-year in 2016, dragged down by life insurers’ lackluster performance, according to the FSS.
Data showed that the country’s insurance companies posted a combined net profit of KRW6.16 trillion (US$5.37 billion) in 2016, down from KRW6.3 trillion in 2015.
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Non-life insurers saw their net income jumped 27.7% to KRW3.46 trillion but that of life insurers decreased 25% to KRW2.69 trillion.
The FSS said in a statement that life insurance companies paid more claims than their premium income last year, contributing to the expanding losses on insurance income. – BusinessNewsAsia.com