Hanwha Life to Suspend New Businesses for One Year... Decides Not to Appeal Financial Supervisory Service's Severe Disciplinary Action Lawsuit

Violation of Major Shareholder Transaction Restrictions
FSS Issues Institutional Warning
20 Billion KRW in Fines and Penalties

Hanwha Group "Fully Accepts Decision
Will Not File Appeal Lawsuit"

Projects Requiring Government Approval
Cannot Proceed for One Year

[Asia Economy Reporter Oh Hyung-gil] Hanwha Life has decided not to file an appeal lawsuit against the heavy disciplinary action imposed by the financial authorities. As insurance companies rapidly enter new businesses such as digital transformation, insurtech, and healthcare, this decision will result in a complete halt of Hanwha Life's new business activities for one year. It is expected that suspending new businesses amid a sluggish insurance market will inevitably deal a fatal blow to management.

On the 15th, a Hanwha Group official said, "After internal discussions, we have decided to respect the decision of the Financial Supervisory Service's Disciplinary Committee and not to file an administrative lawsuit, fully accepting the decision."

In September, the Financial Supervisory Service (FSS) held a disciplinary hearing and issued a warning to Hanwha Life for violations such as restrictions on transactions with major shareholders under the Insurance Business Act, based on the results of a comprehensive inspection conducted last year. Along with this, a fine and penalty amounting to 2 billion KRW were imposed.

During the comprehensive inspection, Hanwha Life was found to have provided financial benefits worth 8 billion KRW free of charge to Hanwha Galleria Timeworld by leasing the Galleria Duty-Free Shop in the 63 Building it owns. Under the Insurance Business Act, insurance companies are prohibited from directly or indirectly providing tangible or intangible assets free of charge to their major shareholders when managing assets.

Hanwha Life conducted a legal review but judged that the practical benefits of filing an objection or administrative lawsuit would not outweigh the time and costs involved. Accordingly, Hanwha Life will be unable to pursue new businesses requiring approval from supervisory authorities for the next year.

Immediately, the acquisition of shares in Carrot General Insurance, a digital non-life insurer subsidiary of Hanwha Asset Management, a Hanwha Life subsidiary, has been delayed. In September, Hanwha General Insurance sold 51.6% of Carrot General Insurance shares to Hanwha Asset Management for 54.2 billion KRW.

To change the major shareholder from Hanwha General Insurance to Hanwha Asset Management, approval from financial authorities is required, and Hanwha Asset Management is a 100% subsidiary of Hanwha Life.

An FSS official stated, "During the review process, we will naturally consider the fact that Hanwha Life, the major shareholder, has been sanctioned. There is also a possibility of passing the review depending on whether it is regarded as a new subsidiary."

Furthermore, entry into healthcare and digital new businesses must be put on hold for the time being.

Regarding this, Hanwha Life stated that nothing has been specifically decided yet. A company official said, "There is still time until the period for filing an administrative lawsuit, so internal discussions are ongoing."

Meanwhile, Samsung Life, which received a warning from the FSS for not paying hospitalization insurance benefits to cancer insurance subscribers hospitalized in convalescent hospitals for cancer treatment, said it is not reviewing future schedules. Since the Financial Services Commission's final decision has not yet been made, the company is closely monitoring the situation. Previously, the Supreme Court ruled that Samsung Life had no problem in not paying the insurance benefits, but the FSS imposed heavy disciplinary action, stating that it cannot be generalized. If the FSS chief accepts the disciplinary committee's decision as is, Samsung Life will also be unable to pass the financial authorities' major shareholder suitability review for one year. This will make it difficult to acquire new subsidiaries and hinder entry into new business areas requiring approval, such as the MyData industry.

This content was produced with the assistance of AI translation services.