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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] The Financial Supervisory Service (FSS) has imposed sanctions on Heungkuk Fire & Marine Insurance for improperly bundling insurance products with loan contracts targeting small businesses and low-credit borrowers.
According to financial industry sources on June 4, the FSS issued a formal institutional warning and a fine of KRW 100 million to Heungkuk Fire on June 2. In addition, one executive received a warning, and five retired personnel were penalized for illegal or unfair conduct.
Insurance companies are prohibited from entering into insurance contracts with borrowers or their associates within one month before or after the initial execution date of loan contracts involving small businesses and low-credit borrowers.
For other consumer loan contracts, insurance contracts signed within one month before or after the initial loan execution must not have monthly premiums exceeding 1% of the loan amount.
The FSS investigation found that between January 2016 and October 2021, Heungkuk Fire concluded insurance contracts with small business representatives within one month of loan contract execution. In April 2016, it also signed insurance contracts within one month of loans issued to low-credit borrowers. Furthermore, in October 2021, insurance contracts were signed within one month of consumer loans, with monthly premiums exceeding 1% of the loan amount.
Heungkuk Fire was also found to have accessed the personal information of 22 insurance contract holders via the company’s IT system between July 2021 and January 2023 during loan review processes unrelated to insurance or health management services, which violated regulations.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
