Lotte Non-Life Insurance consolidated some units related to long-term insurance products as it moved to streamline operations. Lotte Non-Life Insurance, which had received a prompt corrective action from the financial authorities due to deteriorating soundness, submitted a management improvement plan last month and received conditional approval. The personnel reshuffle appears to be a follow-up step for management improvement.
According to the financial industry on the 9th, Lotte Non-Life Insurance abolished the long-term CPC planning institutional sector and the long-term service institutional sector last month and integrated them into their upper units, the long-term CPC strategy group and the long-term product group, respectively. At the same time, the long-term general control unit, previously overseen by an executive vice president-level executive, was reassigned to a senior vice president-level executive. These units handle sales-related work for long-term insurance products. Lotte Non-Life Insurance is said not to be considering a plan to reduce headcount in the units affected by this personnel change.
The Financial Services Commission decided in Nov. last year to impose a prompt corrective action (management improvement recommendation) on Lotte Non-Life Insurance. It judged that capital management adequacy and sustainability were insufficient. In response, Lotte Non-Life Insurance submitted a management improvement plan to the financial authorities in January, but the financial authorities did not approve it, and the stage of prompt corrective action was raised to a "management improvement demand." Lotte Non-Life Insurance resubmitted the management improvement plan last month and received conditional approval.
Going forward, Lotte Non-Life Insurance must carry out its management improvement plan over one year and six months in accordance with relevant laws and regulations, including the disposal of nonperforming assets, organizational efficiency, and capital expansion. The Financial Services Commission (FSC) and the Financial Supervisory Service will review the company's performance in implementing the management improvement plan. This organizational reshuffle is also seen as "organizational slimming" for management improvement.