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Lee Chan-jin, Governor of the Financial Supervisory Service (Photo = Yonhap News) |
[Alpha Biz= Paul Lee] Lee Chan-jin, Governor of the Financial Supervisory Service (FSS), stated on September 1 that the accounting controversy surrounding Samsung Life Insurance will be resolved promptly in line with international accounting standards. This marks the first time Lee has publicly addressed the issue.
Speaking to reporters after a meeting with 16 life insurance CEOs at the Life Insurance Education & Culture Center in Seoul’s Jongno District, Lee said, “Rather than delaying or temporarily patching up Samsung Life’s accounting issue, it is desirable to fundamentally resolve it at this opportunity.” He added, “The provisional direction is normalization in accordance with international accounting standards.”
The key point of contention lies in whether Samsung Life should continue to treat its affiliate equity holdings under the exceptional category of “policyholder equity adjustment.” Under IFRS 17, introduced in 2023, equity stakes in affiliates such as Samsung Electronics should be reflected as insurance liabilities that fund participating policyholder dividends. However, the FSS allowed an exception under “policyholder equity adjustment” to prevent confusion for financial statement users.
Recently, the Korea Accounting Standards Board (KASB) raised objections, arguing that Samsung Life’s handling of its 15.43% stake in Samsung Fire & Marine Insurance should fall under the equity method of accounting, despite being below 20%, since the insurer was officially designated as a subsidiary under the Insurance Business Act in March. The FSS has already collected industry opinions on the matter last month.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
