중앙데일리

Listing for insurers may come with a pricetag

Small and medium players in the insurance industry are not fond of the charity fund idea.

Mar 22,2007
As Korea’s life insurance companies prepare to be listed on the nation’s stock markets, the major sticking point no longer seems to be whether they should be listed or not.
Instead, the hot issue is if the companies must donate some of their profits.
In January, Yoon Jeung-hyun, governor of the Financial Supervisory Service, urged life insurers “to rid themselves of any negative public image and come up with specific ways to regain public trust.”
Then, earlier this month, the Korea Life Insurance Association suggested to 22 life insurance companies that they form a public charity fund of up to 1 trillion won ($1.1 billion), now that the listing, which has been in the works for nearly two decades, is almost finalized.
According to the proposal, life insurers would be asked to give 0.25 percent of their pretax income to the charity fund before being listed, and 0.5 percent of pretax income for 20 years after they are listed.
Major companies such as Samsung and Kyobo are in favor of the charity fund.
They have enough cash in the bank to get listed on the stock exchange, and listing would enhance their global competitiveness. Still, they maintain that giving back to society is not a precondition to being listed.
Meanwhile, small and medium players in the insurance industry, who have no immediate plans to list, along with foreign life insurers, are not fond of the charity fund idea. The life insurers’ association said foreign insurance firms have not decided if they will chip in for the fund. “We shouldn’t have to contribute anything, but we’re wary of public perception,” said an employee at a foreign insurance company, who declined to be named.
Civic activist groups that had opposed listing of life insurance firms now argue that profits from listing should be returned to policyholders, not to the general public. The civic groups say policyholders contribute to the business of insurance companies and help them get listed, and thus deserve some payback for their cash outlay.


By Kim Chang-gyu JoongAng Ilbo [jeeho@joongang.co.kr]



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