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Photo = Yonhap news |
[Alpha Biz= Paul Lee] The Financial Supervisory Service (FSS) has imposed institutional sanctions on Heungkuk Life Insurance for violating corporate governance laws, including the failure to report executive appointments and not complying with the requirements for an audit committee.
The FSS announced on Tuesday that it had sanctioned Heungkuk Life with an institutional warning, a fine of 122 million KRW, and a penalty of 9,440 KRW.
The primary issue was that Heungkuk Life failed to report the appointment of executives to the FSS within the required seven business days. Despite five executive changes, including the appointment of CEO Park Chun-won in March 2021, the company did not report them on time.
Heungkuk Life also violated regulations regarding the composition of its audit committee. According to the Financial Companies Governance Act, at least one member of the audit committee should be an expert in accounting or finance. However, from July 2022 to March 2023, Heungkuk Life did not include such experts in the committee.
The company also violated the rule requiring separate compensation and evaluation criteria for its compliance officer and risk management officer. Between 2018 and 2022, Heungkuk Life paid these officers performance-based compensation in the same manner as other executives, without setting the required separate standards.
Additionally, the FSS pointed out that Heungkuk Life inadequately disclosed its governance annual reports. The company failed to report a significant legal contract, worth 360 million KRW, with a law firm to which its outside directors were affiliated, from 2019 to 2022.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
