Posted February. 21, 2007 07:10,
It was confirmed that Financial Supervisory Commission (FSC) issued an internal report that says, Kyobo Life Insurance and Samsung Life Insurance did not pay a total due of 855.2 billion won of dividends to their policyholders from the year 1984 through last year (for 23 years).
Accordingly, the FSC is expected to advise the two life insurance companies to donate a welfare fund that had been in place before their Initial Public Offerings (IPO).
According to the FSCs confidential internal document titled References concerning life insurance company IPOs, acquired by this paper, the FSC analyzed that from 1984 to 2006, Kyobo Life Insurance and Samsung Life Insurance did not pay 458.7 billion won and 396.5 billion won, respectively.
The FSC said in the report that before the year 1998, life insurance companies paid 70 to 85 percent of profits divided among their policyholders. The agency speculated that if retroactively calculated based on 90 percent of profits that can be offered to policyholders as dividends, a standard that domestic life insurance companies currently use, the amount of capital from both companies that was not paid out in dividends reached 595.4 billion won.
Also, when adding the interest on asset management profits, 259.8 billion won, the two companies underestimated dividends for their policyholders went up to 855.2 billion won.
The life insurance companies concerned responded to the FSCs analysis, saying, It cannot be accepted.
One official from a life insurance company said, There is no international rule that fixes settled dividends based upon portions of companies profits. Nonetheless, the FSC applied its ratio randomly to domestic life insurance companies, and the agency says that dividends paid to our policyholders were underestimated. It is nonsense.
The IPO Advisory Committee, which bears the whole responsibility for life-insurance company IPOs, announced on January 5, We cannot say that those companies paid less dividends to their policyholders.