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Samsung Life Insurance to litigate immediate annuity dispute

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Samsung Life Insurance to litigate immediate annuity dispute

The board of Samsung Life Insurance Co. Ltd. plans to take a growing dispute with immediate annuity customers to South Korea's courts, The Hankyoreh reported July 26.

The dispute stems from a complaint filed with the country's Financial Supervisory Service in 2017 by policyholders of the insurer's immediate annuity plan, who claimed they were underpaid on their monthly annuity income.

Samsung Life Insurance is disputing the claim by citing the need to set aside reserves for future expenses out of the initial premiums paid by clients.

Earlier in July, FSS Governor Yoon Suk-heun publicly sided with the annuity policyholders.

The case has major implications for South Korean life insurance companies given that the number of such clients total 160,000 domestically. Alleged underpayments to Samsung Life Insurance's annuity plan policyholders alone total 420 billion won, the publication said.

The exposure to similar underpayment claims could reach more than 80 billion won at Hanwha Life Insurance Co. Ltd. and more than 60 billion won at Kyobo Life Insurance Co. Ltd., it added.

As of July 26, US$1 was equivalent to 1,122.45 South Korean won.