The company’s earlier plan was not approved, and it subsequently received a formal management improvement order from regulators. With that backdrop, the specificity and feasibility of the new capital-raising measures are expected to be central to the Financial Services Commission’s review.
Lotte Insurance said May 4 that it submitted the plan to financial authorities on April 30. The plan includes cutting expenses, disposing of troubled assets, improving staffing and organizational operations, and increasing capital.
It also calls for drawing up plans related to a merger, becoming a subsidiary of a financial holding company under the Financial Holding Companies Act, a third-party acquisition, and transferring all or part of its business.
Lotte Insurance submitted its first management improvement plan to the commission in January, but it was not approved. The commission then issued a management improvement order, a step above a management improvement recommendation under Korea’s prompt corrective action framework.
Industry watchers said the key issue in the review will be whether the capital-strengthening measures are workable. They noted that after the first plan failed to win approval, regulators are likely to focus on whether proposals such as a capital increase or acquisition-related steps are concrete enough to execute.
The commission is expected to decide whether to approve the plan within one month of its submission. If approved, Lotte Insurance would proceed with the measures recognized by authorities, including cost cuts, troubled-asset cleanup, operational changes and capital strengthening. If not approved, additional revisions or follow-up steps remain possible.
* This article has been translated by AI.
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