Samsung Life Insurance is reviewing a plan to incorporate Samsung Fire & Marine Insurance as a subsidiary. Samsung Life Insurance plans to reveal related details during the announcement of its fourth quarter and annual operating results on the 20th.
According to Samsung Life Insurance on the 4th, after Samsung Fire & Marine Insurance announced a share buyback plan as part of its value-up strategy on the 31st of last month, Samsung Life Insurance is considering a plan to incorporate Samsung Fire & Marine Insurance as a subsidiary. Samsung Fire & Marine Insurance presented a plan to reduce its current share buyback ratio of 15.93% to below 5% by 2028.
Samsung Life Insurance is the largest shareholder, holding 14.98% of Samsung Fire & Marine Insurance's equity. If Samsung Fire & Marine Insurance buys back its shares, the equity ratio of Samsung Life Insurance will increase simultaneously. Analysts say that if Samsung Fire & Marine Insurance's share buyback ratio drops to 5%, Samsung Life Insurance's equity ratio will rise to 16.93%.
In this case, the current financial regulations concerning insurance companies' ownership of other companies' stocks become problematic. According to the Insurance Business Act, insurance companies cannot hold shares exceeding 15% in another company. However, this is only allowed for companies that have received approval from the Financial Services Commission for subsidiary incorporation. This means that if the equity ratio of Samsung Life Insurance in Samsung Fire & Marine Insurance exceeds 15%, Samsung Life Insurance must incorporate Samsung Fire & Marine Insurance as a subsidiary or sell off the excess equity.
Regarding this, a representative from Samsung Life Insurance noted, 'We are reviewing the value-up details of Samsung Fire & Marine Insurance,' adding, 'Specific details will be revealed during the operating results announcement on the 20th.'