17 more insurers earn premium discount ratings, 16 fewer face surcharges: KDIC

By Kim Byeo-ri, The Herald Business

The Korea Deposit Insurance Corporation (KDIC) announced Monday that it had notified 269 insured financial institutions of their differential assessment ratings and corresponding deposit insurance premium rates for fiscal year 2025.

Insured financial institutions are those that pay deposit insurance premiums to the KDIC while receiving insurance coverage. They include banks, securities firms, insurers, comprehensive finance companies and mutual savings banks.

The KDIC evaluates the financial and management conditions of insured institutions and assigns premium rates across seven tiers, applying a differential surcharge or discount of up to 10 percent above or below the standard deposit insurance premium rate for each sector.

The assessment placed 59 institutions in discount tiers (discount grades 1–3), 126 at the standard grade and 84 in surcharge tiers (surcharge grades 1–3). The number of institutions in discount tiers rose by 17 from the previous year, while those in surcharge tiers fell by 16.

In the banking sector, the number of institutions earning discount ratings declined, as tightened liquidity regulations weighed on liquidity scores and sluggish domestic demand eroded asset quality.

The insurance and financial investment sectors were evenly distributed around the standard grade. The savings bank sector, by contrast, saw fewer institutions in surcharge tiers, as non-performing real estate project financing (PF) loans were resolved and more savings banks returned to profitability.

Total deposit insurance premiums for fiscal year 2025 are projected at 2.564 trillion won (approximately $1.69 billion), up 69.5 billion won from the previous year, reflecting a 15 billion won increase in insured deposits.

Meanwhile, KDIC President Kim Seong-sik said at the corporation's 30th anniversary ceremony that the deposit insurance system faces "an unprecedented turning point requiring a fundamental redesign," as the special account for savings banks and the KDIC bond repayment fund approach their expiration dates in succession. "We can no longer delay the introduction of a financial stability account — which would provide effective funding before a crisis erupts to prevent the spread of insolvency — or a rapid resolution regime that allows administrative measures such as contract transfers to be carried out swiftly in the event of a bank run," he said. He added that the KDIC must also "overhaul the deposit insurance premium structure by recalculating the appropriate target fund size and premium rates, and pursue system improvements that take into account the characteristics of each financial sector and its policyholders."