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[Alpha Biz= Kim Jisun] SEOUL, November 11, 2025 — Lotte Insurance Co. plans to take legal action against South Korea’s Financial Services Commission (FSC) over the prompt corrective measures imposed earlier this month.
According to financial industry sources, Lotte Insurance will hold a board meeting on November 11 to approve both a request for an injunction to suspend the enforcement of the FSC’s order and a main administrative lawsuit. The firm has reportedly appointed Kim & Chang as its legal representative.
The dispute centers on the FSC’s criticism of Lotte Insurance’s deferral of the Own Risk and Solvency Assessment (ORSA) framework, which the regulator cited as a key reason for issuing the corrective action. Lotte argues the measure is unfair, noting that 28 of 53 domestic insurers have also postponed ORSA implementation.
On November 5, the FSC issued a “management improvement recommendation”, a form of prompt corrective action, after judging the company’s capital adequacy ratio (K-ICS) to be significantly below industry standards. The insurer must submit a capital-improvement plan — including potential asset sales and cost-reduction measures — within two months.
While day-to-day operations continue, the regulatory action has damaged the firm’s market reputation. Lotte Insurance is also required to suspend interest payments on ₩460 billion worth of hybrid securities starting December 17 under the corrective order.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
