The Financial Services Commission (FSC) announced on April 13 that it has designated MG Non-Life Insurance as an insolvent financial institution.
“As of the end of February, MG Non-Life Insurance’s debt exceeded its assets by 113.9 billion won, meeting the criteria for an insolvent financial institution under the Act on Structural Improvement of the Financial Industry,” the FSC explained.
MG Non-Life Insurance’s net loss in 2021 stood at 61.7 billion won, down 38.8 billion won from the previous year, but the company continued to post a deficit. At the end of 2021, its RBC ratio stayed at 88.28 percent, which was less than 100 percent, a standard set by the Insurance Business Act.
MG Non-Life Insurance submitted to the FSC a plan to raise 36 billion won by March and 90 billion won by June, but failed to receive approval. The FSC is planning to sell the insolvent insurer.
In fact, the sale of MG Non-Life Insurance has already begun. So far, large fund management companies, including Glenwood PE, SKS Credit, Pine Tree Asset Management, and Banker Street PE, have submitted a letter of intent (LOI) to take over the insurer to Samil PwC, which is in charge of its sale . MBK Partners is reportedly considering submitting an LOI.
Market watchers estimate the acquisition price of MG Non-Life Insurance at around 500 billion won. The price includes a capital increase worth 200 billion won.