Korean life insurers allowed to go public

Korean life insurers allowed to go public

국내 생보사 상장 허용

Korea's financial regulator announced yesterday it would let life insurance companies list shares on the main stock market as part of efforts to upgrade the industry. "The listing of life insurers is expected to help enhance their transparency and give them a means of expanding capital by selling shares," the Financial Supervisory Commission said in a statement. Industry leader Samsung Life Insurance and third-ranked Kyobo Life Insurance have pushed for initial public offerings since 1989 but hit a snag over how they would distribute the proceeds to policyholders, Yonhap news agency said. To break the deadlock, the government launched an advisory committee under the Korea Exchange in February that submitted revised rules on stock listing. Among other provisions, these stipulate that policyholders do not deserve part of the gains from the IPOs because they are not shareholders. The rules are opposed by some policyholders and civic groups who believe they are entitled to some of the gains. The Korea Life Insurance Association, which represents 22 companies, announced this month that they would donate 1.5 trillion won ($1.6 billion) over the next 20 years to policyholders. Immediately after the approval, however, opponents filed a complaint with prosecutors against FSC officials on charges of malfeasance. Companies which want to go public must retain an internal reserve ratio of 25 percent and must have generated a profit in the previous fiscal year. Five firms qualify and Kyobo Life Insurance is expected to be the first to list later this year, Yonhap said. Samsung Life Insurance has not unveiled a listing plan but has called for local life insurers to go public so they can emerge as global players. "IPOs will serve as an opportunity to upgrade Korea's insurance market by one notch," Kim Yong-hwan from the FSC told reporters. He dismissed the complaint by policyholders, saying all steps have been taken to gather opinions on the revised rules. As of the end of 2006, the total assets of the 22 life insurers came to 265.8 trillion won. From news reports