Financial strength is the best in the industry … AIG is advised to improve management

AIG, which enjoys the highest financial strength among non-life insurers operating in Korea, received a recommendation from the financial authorities earlier this month. The financial authority considers that internal control is insufficient, for example in case of malfunction of the board of directors, apart from the financial strength of the highest authority in the industry.

According to the insurance industry, the 21, the Financial Services Commission (FSC) held a regular meeting at the beginning of the month and decided to recommend the improvement of the management of AIG. If you receive a recommendation to improve the management of the financial system, you must submit an improvement plan within two months. If the plan is deemed insufficient, it receives in turn "Management Improvement Request" and "Management Improvement Order". When a management improvement order is issued, the CEO and officers are suspended and the severance pay is suspended.

The Financial Supervisory Commission and the Financial Supervisory Service reported that the AIG Board was operating improperly and that the audit plan that had been reported was not properly implemented. implemented. It has also been reported to AIG that the Consumer Protection Council, which should be held every quarter to protect consumers, also works poorly.

In the insurance sector, AIG is the only company to receive management improvement recommendations due to insufficient internal control. Companies whose financial strength deteriorates receive recommendations for regular improvement of management. MG Sonbo, who had received recommendations and requests for improvement over the past year, is well below the recommendation ratio of financial authorities (150%), the ratio of RBCs, which is a key indicator of strength insurers. At the end of last year, RBC's ratio of AIG was 411.5%, the highest in the industry. "This means that there is a big hole in AIG's internal control," said an insurance industry official.

Kang Kyung Min reporter [email protected]

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