Will Samsung Life face FSS's punitive measures?

Samsung Life Insurance is facing Financial Supervisory Service scrutiny. / Korea Times file

By Anna J. Park

The country's financial watchdog plans to hold another round of committee meetings on Dec. 3 to decide on measures against Samsung Life over allegations the insurer did not appropriately pay cancer patients' hospice charges and on separate allegations that it violated restrictions on major shareholders.

The Financial Supervisory Service (FSS) held a sanctions review committee meeting on Nov. 26, from 2 p.m. to the late evening, but failed to reach a conclusion on the day.

“The FSS's sanctions review committee continued until late in the evening, listening to statements from Samsung Life's related officials and legal representatives,” the FSS said in a text message to reporters late Thursday. “But due to a lack of time, Thursday's meeting was ended and the FSS will resume the meeting on Dec. 3 for further deliberation.”

The committee is scrutinizing allegations Samsung Life, the nation's leading insurer, did not pay the claims of cancer patients for hospice care.

Samsung Life refused to pay the claims, saying care at hospice centers is not directly related to cancer treatment. The dispute went to trial and the insurer won the final case at the Supreme Court.

However, some industry watchers view that winning the lawsuit will not affect the FSS's sanctions review committee, given the financial watchdog's recent move to strengthen consumer protection.

The FSS is also looking into whether Samsung Life violated trading restrictions by major shareholders when the insurer contracted Samsung SDS to work on the development of its computing system.

The contract stated that the insurance company would receive compensation if Samsung SDS failed to meet deadlines. However, according to industry sources, the FSS's investigation showed the insurance arm of Samsung Group did not receive compensation from Samsung SDS.

If it is sanctioned, the insurer will not be able to move into new business areas in which approval from financial authorities is required. This means the company could face hurdles in its business plans for the next year in healthcare sectors as well as in MyData Initiative projects ― government-approved big-data business projects using customers' personal information.