South Korea’s Financial Supervisory Service (FSS) plans to back civilian lawsuits against life insurers that have defied administrative order to return underpaid dues in immediate annuity pensions to policy holders upon request.

An official from the financial watchdog said it will back consumers if they choose to file damage claims on life insurers in legal cost and other necessary support.

The current law allows the FSS to support lawsuits filed by complainants if it finds damage actions taken by a financial institution “severely” insufficient or unfair.

There has been no single complaint that has led the administration to interfere for support since the system was adopted in 2010.

The financial regulator ordered Samsung Life Insurance Co. last month to pay 430 billion won ($384 million) underpaid dues to 55,000 clients by accusing it for deducting part of payout as working expenses without mentioning the term in the contract. It also recommended Hanwha Life Insurance Co. reimburse the underpaid payment to its clients, but both of the insurers rejected the authority’s remedial orders.

The FSS plans to announce its measures to resolve the immediate annuity issue by holding a press conference on Thursday. Samsung Life and Hanwha Life are also preparing for possible legal battles, according to sources.

By Lee Seung-yoon and Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]