English translation of the original Korean report. Images and source documents may contain Korean text.

The Financial Supervisory Service ordered insurance company CEOs to strengthen consumer protection evaluation…Attention is focused on whether the accident management and performance-based compensation will be reflected

With the financial authorities ordering the strengthening of consumer protection in the performance evaluation of insurance company CEOs, the president of KB Insurance, Goo Bong-wook, who disclosed a temporary loss of 14 billion won due to an employee’s embezzlement of termination refunds, is approaching the end of his term this year.

According to KB Insurance’s initial financial accident announcement on the 9th, the period of unauthorized transfers by employees was from August 30, 2024, to March 5, 2025. The affected insurance contracts were those where the beneficiary’s death led to unclaimed termination refunds for a long time, and the incident was revealed through a report by another employee. The initially disclosed temporary loss amount was 14 billion 205 million 6000 won.

At the time of the incident, the president held both the positions of CEO and chairman of the board of directors, and was reappointed once at the end of last year when the incident was revealed. With his term expiring at the end of this year, it has become a point of interest how the improvements in internal controls and consumer protection measures after the incident have been reflected in the evaluation of the management.

Recently, the government and financial authorities have emphasized the need for substantial improvements in the identified issues and the responsibility of the management. President Lee Jae-myung urged all ministries at the cabinet meeting on the 3rd to review the issues raised during the audit and to reflect the necessary improvements in policies.

In the insurance industry, the Financial Supervisory Service previously pointed out that the performance evaluation of insurance company CEOs was biased towards short-term results, and ordered them to reflect long-term financial soundness and consumer interests in the evaluation and improve the management compensation system.

Under this trend, the key issues remain whether KB Insurance has taken protective measures for the right holders of the refund and how the results of the incident management have been reflected in the reappointment review and long-term performance-based compensation calculation of Goo Sa-jeong last year.

■ Improvements in internal controls after the incident…Whether it is reflected in the reappointment review is unclear

After the incident was discovered, KB Insurance inspected and improved the customer payment procedures through a dedicated internal control team in April 2025, and in June, it promoted the improvement of the computer system. On the same day, 26th, the regulations were changed to have an external director serve as the chairman of the board of directors, and Jo Jae-ho, then an external director, was appointed as chairman.

After that, the KB Financial Group Subsidiary CEO Nomination Committee recommended Goo Sa-jeong as a reappointment candidate on December 16, 2025, and KB Insurance also approved the recommendation with the support of all four committee members on the 23rd of the same month. Although the publicly disclosed reasons for the recommendation included financial and risk management expertise and improvement of market share, it is not confirmed how the results of the embezzlement incident were reflected in the review.

According to KB Insurance’s first half report for 2026, the first half remuneration of Goo Bong-wook is 1.215 billion won. Of this, 990 million won is half of the long-term performance-based compensation calculated based on the performance evaluation of the 2024-2025 period when the termination refund embezzlement incident occurred and the relative total shareholder return, which was paid in cash this year.

The other half is scheduled to be paid in installments over three years from 2027 linked to KB Financial’s stock price. The establishment of internal control and risk management systems was included in the qualitative evaluation items, but the company did not disclose how the results of this incident were reflected in the evaluation.

The Internal Control Committee under the KB Insurance Board of Directors deliberated on the inspection and evaluation plan for the implementation of internal control obligations by the CEO and executives on February 27 this year. However, the company has not disclosed information on when it informed the right holders of the refund about the incident and how much was paid in how many cases as of the 9th.

With the additional reappointment of Goo Sa-jeong approaching, the key issues remain the improvements in internal controls after the embezzlement incident, the protective measures for the refund right holders, and whether the results of the incident management are reflected in the management evaluation.