Lotte Insurance said on the 2nd that it submitted a management improvement plan to the Financial Services Commission that includes cutting business expenses, disposing of poor asset, and improving personnel and organizational operations.
The Financial Services Commission in Nov. last year issued Lotte Insurance the lowest-level prompt corrective action, a management improvement recommendation. Lotte Insurance received an overall grade of 3 in the Financial Supervisory Service's management status assessment, but it received a grade of 4 in the capital adequacy institutional sector, making it subject to prompt corrective action.
Lotte Insurance, opposing the Financial Services Commission's decision, filed for an injunction to suspend the effect of the management improvement recommendation. However, the Seoul Administrative Court in Dec. last year dismissed Lotte Insurance's injunction request. In line with the court's decision, Lotte Insurance had to submit the management improvement plan by that day.
If the Financial Services Commission approves Lotte Insurance's plan within one month, Lotte Insurance must carry out the submitted plan for the next year. If the Financial Services Commission judges the plan to be unreasonable, it can raise the prompt corrective action by one level to a management improvement request.
Separately from submitting the management improvement plan, Lotte Insurance is pursuing a main lawsuit seeking to cancel the management improvement recommendation.