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Photo = Yonhap news |
[Alpha Biz= Reporter Kim Sangjin] Samsung Life Insurance has been fined over 2 billion KRW for engaging in improper insurance switching and the incomplete sale of financial investment products, following an inspection by South Korea's financial authorities.
On December 2, the Financial Supervisory Service (FSS) announced that it had issued a warning to Samsung Life regarding the incomplete sale of financial investment products, along with other corrective measures, such as notifying the company of illegal actions involving its retired employees.
The company was found to have violated the Capital Market Act by failing to explain key aspects of funds to 122 general investors from November 2017 to March 2020. A total of 125 fund accounts were sold, with the amount invested reaching 22.94 billion KRW. Samsung Life had distributed fund proposals from the asset management company without correcting or providing full disclosures, leading to the improper sale of financial products. Additionally, the company violated suitability principles by failing to properly assess clients' financial circumstances, investment goals, and experiences before selling products.
Separately, the FSS also imposed a fine of 2.02 billion KRW on Samsung Life for improper insurance switching. This involved canceling existing insurance contracts and forcing policyholders to sign new ones, which is considered an incomplete sale. Between March 2019 and March 2021, Samsung Life used its bancassurance channel to sell 114 life insurance contracts without properly comparing the key details between the old and new policies. This failure to inform policyholders about crucial contract terms led to the improper switching practice.
The FSS also uncovered similar violations at other insurance companies, including Mirae Asset Life (926 million KRW fine), Hanwha Life (766 million KRW), Dongyang Life (366 million KRW), Shinhan Life (192 million KRW), Heungkuk Life (52 million KRW), iM Life (112 million KRW), ABL Life (24 million KRW), and Fubon Hyundai Life (11 million KRW).
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
