Insurance Companies Enter Shareholders’ Meeting Season... Accelerating Board Restructuring and Commercial Act Amendments

Shareholders' Meetings Begin for Insurers from the 18th
Bureaucrats and Regulatory Experts Appointed as Outside Directors
Articles Amended for Cumulative Voting... Expanded Treasury Share Cancellation

Major domestic insurance companies will begin holding regular shareholders' meetings from mid-March to address board appointments and strengthen their corporate governance structure. Amid a growing trend of appointing former government officials and experts in policy and finance as outside directors, measures to revise articles of incorporation in response to the cumulative voting system and to enhance shareholder returns, such as the cancellation of treasury shares, have become key agenda items.

According to the insurance industry on March 10, major listed insurance companies such as Tongyang Life Insurance, Mirae Asset Life Insurance, Samsung Life Insurance, Samsung Fire & Marine Insurance, Hanwha Life Insurance, Hanwha General Insurance, Hyundai Marine & Fire Insurance, and DB Insurance will hold regular shareholders' meetings starting in mid-March. Hanwha General Insurance will be the first to hold its shareholder meeting on March 18, followed by Samsung Life Insurance on March 19, and Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, and DB Insurance on March 20. Tongyang Life Insurance will hold its meeting on March 23, Hanwha Life Insurance on March 24, and Mirae Asset Life Insurance on March 26.

Mirae Asset Life Insurance draws attention for its CEO appointments, as it plans to reappoint Vice Chairman Kim Jaesik and Vice President Hwang Moonkyu as co-CEOs through the shareholders' meeting and board of directors. Under the co-CEO system last year, Mirae Asset Life Insurance achieved a record-high pre-tax profit of 198.7 billion won, marking a 61.4% increase year-on-year.

Hanwha Life Insurance plans to newly appoint Yoo Changmin, Head of Investments, as an internal director. The position of Head of Management Support will be replaced by an investment executive. This move is interpreted as an effort by the board to strengthen the strategic importance of investment functions amid increasing global macroeconomic volatility.

Regarding the selection of outside directors, individuals with both governance and regulatory expertise are in the spotlight. Samsung Fire & Marine Insurance has nominated Kim Jaesin, former Vice Chairman of the Korea Fair Trade Commission, as a new candidate for outside director. By bringing in a former government official with extensive experience in fair trade and corporate regulation, the company aims to strengthen responsible management and compliance systems. Industry observers interpret this as a move to enhance the company's ability to respond to agenda items under the jurisdiction of the Fair Trade Commission, such as insurance contract bid collusion.

Hyundai Marine & Fire Insurance plans to appoint Professor Ahn Donghyun of Seoul National University's Department of Economics as a new outside director. Professor Ahn, who previously served as an outside director at Meritz Financial Group, is an expert in capital markets and financial policy, having led the Korea Capital Market Institute and served as Chairman of the Financial Development Review Committee at the Financial Services Commission. Hyundai Marine & Fire Insurance stated, "Based on his many years of experience as an outside director and audit committee member at financial companies, Professor Ahn is expected to faithfully perform the board's oversight functions and make decisions to protect shareholders and consumers."

This trend of appointing former government officials or policy and finance experts as outside directors is spreading throughout the insurance industry. Currently, about half of the outside directors at the eight major listed insurance companies are former government officials. Following last year's introduction of the duty structure and strengthened capital regulations, as well as the anticipated expansion of new businesses and the need to defend profitability, demand has grown for directors with policy response capabilities.

Amendment of Articles for Cumulative Voting System... Strengthening Shareholder Returns

Insurance companies are also actively responding to the amendments in the Commercial Act. Samsung Fire & Marine Insurance, Samsung Life Insurance, Hanwha General Insurance, Hyundai Marine & Fire Insurance, and DB Insurance have either deleted provisions excluding the cumulative voting system from their articles of incorporation or have submitted relevant proposals in line with the intent of the amended law. The cumulative voting system allows shareholders to exercise as many votes as the number of shares they hold multiplied by the number of directors to be elected, thus increasing the likelihood for minority shareholders to concentrate their votes and elect a specific candidate to the board.

Strengthening shareholder returns is another key agenda item. Hyundai Marine & Fire Insurance plans to approve a proposal at this shareholders' meeting regarding the holding and disposal of treasury shares. Of its total treasury shares, which account for 12.29%, only 3% will be retained for employee compensation, while the remaining 9.29% will be canceled over two years starting this year.

Mirae Asset Life Insurance is also set to proceed with treasury share cancellation procedures. Earlier, on March 4, Mirae Asset Life Insurance decided to cancel 62.96 million treasury shares, equivalent to approximately 93% of its holdings. The company stated, "This cancellation was reviewed and resolved by the board of directors as a voluntary effort to enhance shareholder value prior to the legislation mandating the cancellation of treasury shares."

This content was produced with the assistance of AI translation services.