[Alpha Biz=(Chicago) Reporter Paul Lee] Amid a heightened sense of crisis over overseas commercial real estate, the Financial Supervisory Service has imposed sanctions on insurance companies that have not properly managed risks related to alternative investment.

According to the financial sector on the 16th, the FSS demanded the strengthening of alternative investment-related stress tests (measurement of the amount available for loss) in the inspection of Lotte Insurance, and notified one case of management attention and three cases of improvement. Management precautions and improvements are administrative guidance measures that require caution or autonomous improvement by financial companies.

According to the Financial Supervisory Service, the worsening situation in the alternative investment market since COVID-19 has made the insolvency of aircraft, ships, hotels, commercial real estate, and power generation and energy sectors invested between 2018 and 2020 a reality. According to the Korea Investors Service, out of Lotte Insurance's KRW 12.8 trillion in operating assets as of the third quarter of last year, alternative investments were KRW 5.7 trillion, and overseas mid- and subordinated investments were KRW 2.2 trillion.

In addition, Lotte Insurance did not regularly report the current status of the company's overall liquidity management and countermeasures to management or related committees, considering the balance difference by account and duration management. It was also pointed out that the high proportion of investment in social overhead capital (SOC) and real estate due to the lack of limit management by product for alternative investment assets, and the lack of criteria for post-inspection of alternative investment assets.

 

[ⓒ 알파경제. 무단전재-재배포 금지]