According to the Financial Supervisory Service (FSS), Samsung Life Insurance Co. failed to pay insurance money according to the policy terms and provide less delay charges than standards, so the FSS fined the company 7.37 billion won (US$6.51 million), which is the highest fine imposed.
Samsung Life violated the duty of interest payment by not paying an additional interest on policy reserve, duty of rescission of insurance contract and claim settlement, duty of rescission of special insurance contract and duty of notification of delayed insurance payment.
Samsung Life didn’t pay 1.12 billion won (US$992,123) of additional interests on a total of 22,847 cases of contracts that provided liability reserves to the insured who died of other factors than disasters during the period from January 2011 to February 2014.
In addition, Samsung Life provided less delay charges on insurance money. The company lowered the rate of delay charges on a total of 150,310 insurance contracts that had delayed payments during the period from January 2011 to October 2014 several times to “50 percent of the estimated interest rate” instead of the interest rate specified in the insurance policy terms. Accordingly, Samsung Life paid 170 million won (US$150,403) less of delayed charges
Samsung Life didn’t allow nine insurance contractors to cancel the special options even after they asked to cancel a total of 49 cases of special options in 34 kinds of contracts, including major adult disease special options, during the period from January 2011 to January 2014.
Previously, Samsung Life provided insurance money on 34,114 cases of insurance contracts from July 2011 to December 2014 up to 36 days later than it should be. However, the company didn’t explain the reason for the delayed payment of insurance, the time to pay for it and the system of provisional payment of the insurance.