Jeong Eun-bo "Will Also Examine Interest Rate Spreads in Secondary Financial Institutions if Necessary" (Comprehensive)

Financial Supervisory Service Holds Meeting with CEOs of Life Insurance Industry

(From left) Byun Jae-sang, CEO of Mirae Asset Life Insurance; Kim In-tae, CEO of NongHyup Life Insurance; Jeon Young-mook, CEO of Samsung Life Insurance; Jung Hee-soo, Chairman of the Life Insurance Association; Jung Eun-bo, Governor of the Financial Supervisory Service; Yeo Seung-joo, CEO of Hanwha Life Insurance; Sung Dae-kyu, CEO of Shinhan Life Insurance; Yoon Yeol-hyun, CEO of Kyobo Life Insurance; Jo Ji-eun, CEO of LINA Life Insurance; Park Chun-won, CEO of Heungkuk Life Insurance. Photo by Financial Supervisory Service

[Asia Economy Reporter Kim Jin-ho] Jeong Eun-bo, Governor of the Financial Supervisory Service, stated on the 25th, "If necessary, we will consider monitoring the interest rate spread between deposits and loans in the secondary financial sector (such as insurance and savings banks)."

After a meeting with CEOs of life insurance companies held at the Millennium Hilton Hotel in Jung-gu, Seoul, in the afternoon, Governor Jeong told reporters, "There is currently no plan to monitor interest rate levels in the insurance sector," but added the above remark.

Earlier, on the 23rd, regarding the controversy over the widening interest rate spread centered on banks, Governor Jeong said, "We are identifying the causes," and "If there are issues in the interest rate determination process, we will examine whether improvements are possible."

Regarding the direction of comprehensive inspections, a key topic in the financial sector, he said, "Inspections will continue to be conducted as needed," emphasizing, "However, we will focus more on preventive inspections to protect financial consumers rather than retrospective inspections, maintaining a balance."

On the criteria for preventive inspections, he responded that financial soundness is important. He said, "If it is necessary to review soundness aspects during ongoing monitoring, we will conduct inspections regardless of timing."

Regarding the request from life insurance CEOs at the meeting to ease healthcare regulations, he said, "We will actively consider it." Governor Jeong added, "The need for the healthcare sector is increasing amid aging and low birthrate trends, and since the life insurance sector desires related regulatory easing, we will review this matter."

Meanwhile, the meeting was attended by Jeong Hee-su, Chairman of the Life Insurance Association, and CEOs of eight life insurance companies. Governor Jeong urged active risk management, saying, "We must learn from the consecutive bankruptcies of seven Japanese life insurance companies."

In his opening remarks at the meeting, Governor Jeong said, "The domestic insurance industry has grown to rank 7th in the world based on premium income, but it faces a challenging business environment due to asset management difficulties caused by negative interest rate margins and competition issues with big tech companies," adding, "We must take the consecutive bankruptcies of Nissan Life, Toho Life, and others following the collapse of Japan's asset bubble as a lesson."

He continued, "The surviving insurance companies at that time were those that did not focus solely on short-term performance but strengthened Asset Liability Management (ALM) and worked hard on risk management," emphasizing, "Our life insurance sector must also respond to crises through proactive capital expansion and discovering new opportunities."

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