Lotte Insurance's request for an injunction to suspend the effect of a prompt corrective action (management improvement recommendation) against the financial authorities was dismissed.
According to the industry on Dec. 31, the 14th Administrative Division of the Seoul Administrative Court dismissed Lotte Insurance's injunction request. The decision came about three weeks after a hearing was held on the 11th on Lotte Insurance's request for an injunction over the management improvement recommendation filed against the Financial Services Commission (FSC).
Accordingly, Lotte Insurance must submit a management improvement plan to the financial authorities by Jan. 2. The plan is set to include measures to strengthen capital adequacy, such as cutting business expenses, disposing of nonperforming assets, and improving personnel and organizational operations. After the Financial Services Commission (FSC) approves the plan, Lotte Insurance will carry out improvements in line with the plan for one year.
Earlier, the Financial Services Commission (FSC) held its 19th regular meeting on Nov. 5 and issued a prompt corrective action (management improvement recommendation) for Lotte Insurance. The measure was carried out based on the financial authorities' management status assessment of Lotte Insurance as of the end of June last year. A prompt corrective action is when the financial authorities compel a financial company to take steps to improve its finances, such as a capital increase or bond disposal. Depending on the severity, there are a management improvement recommendation, a management improvement requirement, and a management improvement order.