FSS Governor Lee Chanjin on Samsung Life Accounting Controversy: "Will Resolve Without Delay" (Comprehensive)

First Meeting with CEOs of 16 Insurance Companies on September 1
"General Direction Set" on Samsung Life Insurance Affiliate Accounting Controversy
Consumer Protection Emphasized Once Again

Lee Chanjin, Governor of the Financial Supervisory Service, stated on September 1 that he would "resolve the issue without further delay" regarding the ongoing controversy over accounting practices at Samsung Life Insurance's affiliates.

After holding a meeting with the CEOs of 16 life and non-life insurance companies at the Center Point Gwanghwamun Building in Jongno-gu, Seoul, that afternoon, Governor Lee met with reporters and said, "We have generally set the direction regarding the Samsung Life Insurance accounting issue," expressing his position.

Lee Chanjin, Governor of the Financial Supervisory Service, is delivering opening remarks at the 'Financial Supervisory Service Governor-Insurance Company CEO Meeting' held on the 1st at the Life Insurance Education and Culture Center in Jongno-gu, Seoul. Photo by Kang Jinhyung

Recently, concerns have been continuously raised by the Korea Accounting Standards Board and political circles regarding the accounting treatment of Samsung Life Insurance's stake in Samsung Fire & Marine Insurance. On August 21, the Financial Supervisory Service convened a closed-door meeting on Samsung Life Insurance's accounting practices, inviting the four major accounting firms (Samil, Samjong, Anjin, and Hanyoung), the Korea Accounting Standards Board, civic groups, and experts. The core issue is that Samsung Life Insurance should process its holdings in Samsung Electronics and Samsung Fire & Marine Insurance in accordance with International Financial Reporting Standards (IFRS17), rather than the previous "exceptional accounting" practices. However, adopting this approach would impose significant financial burdens on Samsung Life Insurance.

Governor Lee explained, "Issues related to Samsung Life Insurance's exceptional accounting have been raised continuously, and from the perspective of the Financial Supervisory Service, we could not avoid reviewing them. We have been examining past guidelines, industry practices, and international accounting standards, and have also been conducting ongoing internal reviews."

Governor Lee plans to announce specific methodologies regarding Samsung Life Insurance's accounting treatment after further internal discussions. He added, "The position of the Financial Supervisory Service is to normalize the accounting practices in accordance with IFRS17."

During the meeting, Governor Lee also urged insurance companies to strengthen consumer protection. He said, "Emphasizing consumer protection is also a key policy direction of the new administration. Poorly designed insurance products can cause consumer harm and distort the healthcare system, so it is essential to strengthen preventive consumer protection measures from the product design and review stages." He continued, "We are currently working on standardization so that financial consumers can fully understand insurance policy terms and conditions, and we will soon release the relevant model."

In addition, Governor Lee requested that insurance company CEOs focus on managing financial soundness, establishing a fair market order, and enhancing social responsibility. The CEOs of the insurance companies expressed their appreciation for the financial authorities' efforts to restore consumer trust and rationalize regulations. They also pledged, at the executive level, to work toward fostering an organizational culture that prioritizes the consumer perspective within the insurance industry.

Governor Lee plans to actively reflect the suggestions and issues discussed at this meeting in future supervisory and inspection work.

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