Regulator on Lookout for Best Option for MG Non-Life Insurance amid Liquidation Woes
SEOUL, March 26 (Yonhap) — South Korea’s financial regulator is currently exploring viable options for the financially struggling MG Non-Life Insurance Co., according to the agency’s chief on Wednesday. The insurer is facing a potential liquidation.
Meritz Financial Group previously withdrew its bid to acquire the non-life insurer earlier this month. The decision was made due to disagreements with the labor union regarding job security.
MG Non-Life Insurance has been up for sale since April 2022, after being designated as a financially weak company by the financial watchdog. The company has already undergone four unsuccessful rounds of sale bids.
Kim Byoung-hwan, the chief of the Financial Services Commission (FSC), stated that there are limited options available for the struggling insurer. “We are closely analyzing what is a feasible and desirable option (for MG Non-Life Insurance),” Kim said, adding that the insurer will be handled in accordance with the law and regulations.
According to the regulator, the insurer’s financial situation continues to decline. Its capital adequacy ratio, according to the Korean Insurance Capital Standard (K-ICS), which is used to measure a financial company’s financial stability, was recorded at 43.4 percent at the end of September. This is significantly below the legally mandated threshold of 100 percent.
The Korea Deposit Insurance Co., which has been attempting to sell the insurer, indicated it would consider all available possibilities, including liquidation, in the event that Meritz Financial rejected its takeover bid.
MG Non-Life Insurance currently has approximately 1.24 million policyholders.
