Samsung Life Insurance's incorporation of Samsung Fire & Marine Insurance has been formalized.
On the 19th, the Financial Services Commission held a regular meeting and approved Samsung Life Insurance's incorporation of Samsung Fire & Marine Insurance. Consequently, Samsung Life Insurance can hold more than 15% of Samsung Fire & Marine Insurance's equity.
Previously, Samsung Fire & Marine Insurance noted in January that it would reduce the proportion of treasury shares to below 5% by 2028 as part of its corporate value enhancement plan. If Samsung Fire & Marine Insurance retires its treasury shares, the largest shareholder's equity will increase from 14.98% to 17%. However, the Insurance Business Act stipulates that insurers cannot hold more than 15% of equity in companies that are not subsidiaries.
In response, Samsung Life Insurance submitted an application for the incorporation of Samsung Fire & Marine Insurance to the Financial Services Commission last month. This is because if Samsung Fire & Marine Insurance becomes a subsidiary, it will not need to sell any equity. Financial authorities determined that there would be no changes to the substantive governance structure and approved the incorporation. Samsung Fire & Marine Insurance also emphasized that there would be no changes to its board-centered management structure.
Previously, Lee Bok-hyun, the head of the Financial Supervisory Service, responded to a question on the 27th of last month regarding whether the incorporation of the subsidiary would strengthen the governance of the Samsung conglomerate under Chairman Lee Jae-yong, saying, 'There is no effect on the substantive governance structure.' He explained, 'There is no difference in terms of accounting effectiveness' and 'The examination is based on the financial requirements related to the solvency ratio, liquidity ratio, and asset management ratio limits in accordance with the relevant laws.'