Samsung Life Insurance for non-payment of cancer insurance premiums Severe disciplinary action… Suspension of new business for one year

FSC decides to sanction the 2019 comprehensive inspection results… A fine of 155 million won was imposed
Non-claimed compensation to affiliates, judged not to be unfair support… 15 billion won in fine
Financial Supervisory Service to issue institutional warnings and sanctions for employees… Decision delayed and controversy over ‘Take care of Samsung’

The plan for severe disciplinary action against Samsung Life Insurance for not paying cancer hospitalization insurance was finalized after a year and two months of delay.

As sanctions such as ‘institutional warning’ and imposition of fines have been finalized, Samsung Life and its subsidiaries will not be able to enter new businesses for one year.

Regarding the results of the sanctions, Samsung Life said, “We plan to determine the direction of response in the future after reviewing the results of the inspection by the Financial Supervisory Service.”

◇ “Rejection of cancer hospitalization insurance payment, violating the terms and conditions… Violation of the Insurance Business Act”
At the second regular meeting on the 26th, the Financial Services Commission deliberated on the results of Samsung Life’s comprehensive examination and determined that refusal to pay for cancer hospitalization insurance was a violation of the Insurance Business Act, and decided to impose a fine of 155 million won with an institutional warning.

The FSC concluded that Samsung Life’s refusal to pay for 496 cancer hospitalization insurance claims violated the Insurance Business Act because it did not comply with the terms and conditions.

Earlier, the Financial Supervisory Service pointed out 519 related cases in the comprehensive inspection.

In the past, Samsung Life refused to pay for cancer hospitalization insurance uniformly, arguing that cancer patients’ admission to a nursing hospital did not fall under ‘direct cancer treatment’.

In this process, medical advice was not properly provided.

Both the Financial Supervisory Service and the Financial Services Commission judged that it was a violation of the terms and conditions for not paying inpatient insurance money to insurers who were admitted to a nursing hospital for treatment according to a doctor’s diagnosis and prescription.

However, the FSC concluded that it was not a violation of the Insurance Business Act with respect to ‘unfair support for affiliates’, another major point to be pointed out.

Earlier, the Financial Supervisory Service’s sanctions review committee (sanctions review) pointed out that Samsung Life had unfairly supported its affiliates by not claiming compensation for delay in contract fulfillment from Samsung SDS, and decided to impose a fine of 15 billion won. lowered the level of sanctions.

As a result, fines and personnel sanctions related to unfair support for large shareholders were eliminated.

The FSC has prepared and improved business processing procedures and standards so that service contracts, inspections, and delay compensation claims can be properly made with outsourced companies such as major shareholders, and a plan to deal with compensation for delay in service contracts signed with Samsung SDS. It was reported to the board and ordered to be implemented.

◇ “Both Samsung Life and the financial authorities are hit by the delay in the disciplinary decision”
The FSC will notify Samsung Life Insurance of the imposition of a penalty surcharge and an order to take measures, while the FSS plans to implement warnings and sanctions on employees and institutions delegated to the head of the Financial Supervisory Service.

According to the agency warning sanctions, Samsung Life cannot enter new businesses for one year from the date of the sanctions.

The same is true for subsidiaries such as Samsung Card.

Samsung Life did not clearly state whether or not to accept it, saying, “We will decide on future countermeasures after reviewing the results of the inspection by the FSS.”

It took more than 13 months for the Financial Supervisory Service to finalize the disciplinary action plan for Samsung Life, which was approved by the Financial Supervisory Service in early December 2020.

Samsung Life and its subsidiaries have been blocked from advancing into new businesses from 2020 to the present because sanctions have not been finalized.

It is for this reason that Samsung Card is the only company in the credit card industry that has failed to develop its own credit information management business (My Data).

If the resolution of sanctions had not taken a long time, restrictions on new businesses such as Samsung Life Insurance may have already been lifted.

An official from the financial industry said, “Samsung Life would not have been able to avoid the institution’s warning and disciplinary action with only cancer hospitalization insurance money.” “He said.

The delay in the resolution of sanctions also took a toll on the financial authorities.

The National Assembly and progressive civil society groups raised suspicions of ‘to take care of Samsung Life’, and rumors of a conflict between the Financial Supervisory Service and the Financial Supervisory Service also surfaced.

If the FSC judged that cancer hospitalization insurance was not in violation of the Insurance Business Act, there was a possibility that the Financial Supervisory Service would have to review the institutional warning and severe disciplinary action itself, leading to confusion.

In fact, the FSC held a legal interpretation deliberation committee and criticized whether it was trying to take care of Samsung Life after receiving the interpretation that ‘refusing to pay insurance money without going through medical advice is not a violation of the terms and conditions’.

A FSC official dismissed the controversy over ‘look after’, saying, “There are many legal issues and it took time to review.”

Some in the insurance industry also gave an interpretation that the FSS’s ‘dust-wiping method’ comprehensive inspection revealed a problem.

An insurance industry official said, “The FSC came to a different conclusion on many of the findings and sanctions proposed by the FSS.”

Jeong Eun-bo, the head of the Financial Supervisory Service, who took office in August last year, emphasizes ‘communication with the market’ and is promoting the inspection system ‘surgery’ including a comprehensive inspection.

/yunhap news