 |
MG Insurance (Photo: Yonhap News) |
[Alpha Biz= Paul Lee] The labor union of MG Insurance has strongly opposed the proposal by financial authorities for partial suspension of business operations and the establishment of a bridge insurance company.
On the 13th, the MG Insurance union held a press conference in front of the Financial Services Commission (FSC) at the Government Complex in Seoul. The union stated, “We demand that unnecessary decisions not be made during the presidential election period, which could cause confusion among the financial market, workers, and consumers. We ask that this review be stopped immediately.”
The FSC is expected to decide on the partial suspension of business operations for MG Insurance and the establishment of a bridge insurance company at its regular meeting as early as the 14th.
The union argued, “An insurance company operates and develops through a virtuous cycle of actively signing new contracts. A business suspension is like handing down a death sentence and executing it at the same time.” The union further stated, “If the FSC proceeds with a business suspension as the easiest way to achieve its goal, the 500 employees of MG Insurance will not cooperate or negotiate with any decision made by the FSC and will engage in a fight to the end.”
A bridge financial institution is a temporary institution established to resolve troubled financial companies, transferring assets and liabilities from existing financial institutions. In the past, during the savings bank crisis, the authorities resolved troubled financial companies by setting up bridge savings banks. However, the establishment of a bridge insurance company would be a first in this context.
If the FSC grants approval, the Korea Deposit Insurance Corporation will establish the bridge insurance company and initiate the management normalization process using reserve funds.
As a result, MG Insurance will effectively go through bankruptcy procedures, and significant restructuring of MG Insurance employees is expected. Since bridge insurance companies are typically organized with minimal staff to manage contracts, a significant portion of the current sales organization and headquarters staff will likely be subject to layoffs.
The union concluded, “We demand that MG Insurance be sold in a way that protects workers, sales families, and 1.25 million customers, and we ask for the correct path and decision to be made.”
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
