MG Non-Life Insurance ordered to improve management by watchdog Korean insurer has to submit new management improvement plan before end of February

Translated by Kim So-in 공개 2022-01-28 08:10:53

이 기사는 2022년 01월 28일 08:08 더벨 유료페이지에 표출된 기사입니다.

South Korea’s Financial Services Commission (FSC) has decided to issue a management improvement order to MG Non-Life Insurance as the ailing insurance company has failed to boost its capital base by the deadline.

FSC held a meeting on Wednesday and decided to issue a management improvement order to the insurer, according to industry sources.

MG Non-Life Insurance, controlled by private equity firm JC Partners, reported to the country’s financial authorities that it will boost its capital base by 30 billion won ($25 million) by the end of 2021, but only 20 billion won increased. It promised an increase of additional 10 billion won within this month, which also failed.

MG Non-Life Insurance and JC Partners have to submit a new management improvement plan by the end of February and complete a 150 billion won capital increase by March 25.

The management improvement plan submitted by the insurer involved boosting the capital base in phases to improve its risk-based capital (RBC) ratio. The company had planned to increase its capital base by 30 billion won by the end of last year and raise an additional capital of 30 billion won. This was expected to be followed by raising 60 billion won in acquisition financing and 30 billion won in subordinate debt.

MG Non-Life Insurance was advised to improve management from FSC in 2021 as it received a rating of lower than 4 in the Risk Assessment and Application System (RAAS) inspection conducted by Financial Supervisory Service (FSS).

The insurer submitted its management improvement plan in August 2021, which was disapproved by FSC. Its new plan submitted in November 2021 received a conditional approval. (Reporting by Eun-sol Lee)
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