Will Samsung Life object to punitive measure for cancer insurance?

Samsung Life Insurance's headquarters in southern Seoul / Yonhap

By Kim Bo-eun

Samsung Life Insurance appears to be mulling its next steps after financial authorities slapped 155 million won ($128,655) in fines and an “institutional warning” on the insurer earlier, for violating regulations in refusing to cover costs for cancer policyholders.

The Financial Services Commission (FSC) gave notice of a punitive measure to be taken against the insurer, Jan. 26, in the form of an institutional warning which prevents the company and affiliates from launching new businesses over the next year that need approval from authorities.

Policyholders of Samsung's cancer insurance earlier called for the insurer to cover costs of being treated at nursing homes, after being treated at hospital, but Samsung had refused, stating these expenses are not covered under the policy.

Yet the FSC concluded that 496 out of 519 cases that Samsung refused to pay for, affected policyholders who had been admitted to nursing homes for cancer treatment.

The Financial Supervisory Service (FSS) will forward the final conclusion to Samsung Life by February. The FSS, as the regulator that inspects financial firms, will notify the insurer of the final punitive measures. The agency conducted a comprehensive audit on Samsung Life in 2019.

The Samsung affiliate could take steps to object to its penalty or file an administrative suit. Suits against punitive measures should be filed within 90 days of notification of the penalty. The insurer has appealed against a court ruling last year that ordered the company to pay holders of its immediate annuity contract.

In the case where the institutional warning is finalized, Samsung Life could refute the penalty, given this would bar the insurer as well as its affiliate, Samsung Card, from launching new businesses.

“We have not been notified by the FSC of what was discussed at the last committee meeting,” a Samsung Life official said Friday. “We are unable to comment as of now on how we will deal with the situation.”

Meanwhile, the FSC stated Samsung Life should take corrective measures for not seeking 15 billion won in indemnities from IT service provider Samsung SDS for failing to complete a 156 billion won project on time.