Prudential Life Insurance Company of Korea incorporated into KB Financial Group, controversy over unfair dismissal of planners with high income
Prudential Life Insurance Company of Korea incorporated into KB Financial Group, controversy over unfair dismissal of planners with high income
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  • 승인 2021.01.04 17:27
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Planners with high income who didn't resign were dismissed under new rules
A planner who made KRW 18.1 billion was dismissed without settlement
Prudential slanders the informant by falsely accusing him of cursing at an employee
About 2,000 planners across the country who were outraged by the decision, formed an emergency field council and started a relay protest with up to 10 people on the 26th of last month in front of the head office located in Prudential Tower, demanding a meeting with the CEO. (Source=EPN News)
About 2,000 planners across the country who were outraged by the decision, formed an emergency field council and started a relay protest with up to 10 people on the 26th of last month in front of the head office located in Prudential Tower, demanding a meeting with the CEO. (Source=EPN News)

KB, which has caused several controversies over the unfair repayment of fees for telemarketers (TM) who were dismissed, is accused this time of unfair dismissal and internal conflict by acquiring a stake in Prudential Life's management rights this time. We interviewed an insurance planner who has worked for Prudential Life Insurance for 27 years to reveal unfair treatment from the company.

Life Planners dismissed after incorporation of Prudential Life Insurance into KB Financial Group

As a final decision to sell off Prudential Life Insurance in April was made and the company was incorporated into KB Financial Group as a subsidiary on September 1, Min Ki-shik, the former vice president/CEO of DGB Life Insurance took office as the new CEO.

Over the course of Prudential Life Insurance's transition into KB Financial Group, mass layoffs took place. Thirteen branch offices across the country were shut down, and more than 300 managers and planners were forced to be relocated. The office space of honorary life planners (ExLP), who had been working as a partner for over 20 years and received the highest career grade, were removed and their pay system was reorganized due to the integration of the branch offices. All of this happened in just three months.

They ordered the termination of contracts for honorary life planners at 13 branches. Although they were allowed to move to any branch office they wanted, they had to quit their jobs if the office would not take them.

About 2,000 planners across the country who were outraged by the decision, formed an emergency field council and started a relay protest with up to 10 people on the 26th of last month in front of the head office located in Prudential Tower, demanding a meeting with the CEO. “There are no rules, no principles, no communication and no mutual respect for partnership. The mission and core values that we have built together have been destroyed,” said the council. “We are asking for a final meeting with the CEO so we can discuss the worsening working environment, unfair actions taken by the management, a lack response to our demand for a meeting and product system,” added the council.

Despite the protest that lasted for 12 days, the CEO did not respond to their demand. Eventually, the protest was temporarily halted due to the outbreak of COVID-19, and most of the 13 branch managers had to quit their jobs after 20 years of service in exchange for just KRW 60 - 100 million as compensation.

Controversy over unfair dismissal of partners who have been with the company for 27 years

Recently, an honorary life planner, who refused to terminate the contract and decided to remain in his job, was unfairly dismissed. (Source=EPN News)
Recently, an honorary life planner, who refused to terminate the contract and decided to remain in his job, was unfairly dismissed. (Source=EPN News)

Furthermore, the situation became worse as an honorary life planner, who refused to terminate the contract and decided to remain in his job, was unfairly dismissed.

The honorary life planner, who was notified of his dismissal, joined Prudential Life Insurance back in 1994 and managed over 800 clients for the last 27 years. He was, in fact, a founding member who contributed more than KRW 18 billion in income for the company. He was also a member of the MDRT(Million Dollar Round Table), a prestigious association of financial professionals with high income.

As he refused to resign, the company started making an excuse for dismissal by way of a matter that happened more than a year ago. As a result, he was forced to transfer from Dawon to Daeryun branch office. Then, the company used an incident in the past where he threatened a FSS(Field Service Specialist) by throwing an umbrella and a bag in August 2019, in order to dismiss him.

"There were a number of occasions where he used verbal abuse and acts of violence traumatizing other employees and disrupting their work as a result,” said the spokesperson from the company.

However, the claim turned out to be false. “At the time, a client who entrusted a large amount of money asked the office about additional premiums but the FSS gave him an incorrect answer causing confusion as a result. That’s why I raised my voice. I threw the umbrella and the bag to SM’s desk which was far from his desk,” said the planner. “We settled the matter as I gave the FSS a letter of apology and flowers with mediation from the SM(Sales Manager). I don’t understand why they brought it up.”

In addition, the company made several accusations to dismiss him. They also used an incident against him where he raised his voice and caused conflicts with the FSS due to a lack of communication when he failed to handle a request for medical records from a client. The company accused him of verbally abusing a staff member.

“After the acquisition, the company changed the system so client's requests are only handled through FSS,” said the planner. “Planners have to report their work schedule to FSS even though they are not employees. When FSS mishandles the work, it was us who have to apologize to the clients. They didn’t even bother to fix the issue and keep scolding us for speaking out.”

Furthermore, the company even tried to interfere with his sales activities.

“For an insurance planner, business cards represent the identity of your business and credibility. It is obvious that I need them for my sales activities and I am a MDRT member but the staff from the head office didn’t give me the cards,” said the planner. “I even asked for a meeting with the CEO through the secretary office but they refused,”

He is currently suffering from depression after being dismissed by the company.

He asked the Review Committee of the head office several times to give him an explanation on the cause of dismissal but they refused. (Source=EPN News)
He asked the Review Committee of the head office several times to give him an explanation on the cause of dismissal but they refused. (Source=EPN News)

 

He asked the Review Committee of the head office several times to give him an explanation on the cause of dismissal but they refused. (Source=EPN News)
He asked the Review Committee of the head office several times to give him an explanation on the cause of dismissal but they refused. (Source=EPN News)

He asked the Review Committee of the head office several times to give him an explanation on the cause of dismissal but they refused.

“The committee is made up of members who are on the side of the CEO. There is no one on the committee who can represent me,” said the planner. The committee unanimously decided to dismiss him after just one day of deliberation and his contract was terminated on the 16th of last month.

There was even more controversy as it was revealed that the head office included a rule on the violation of the contract which was not there when the contract was terminated. “While working as an LP, I had a good relationship with other offices and was recognized for good job performance. The CEO and the company tried to destroy my career and everything I have built over the years,” said the planner.

It was also reported that he did not even receive the settlement he was entitled to. We asked the company about it for confirmation but the spokesperson did not get back to us.

The head office included a rule on the violation of the contract which was not there when the contract was terminated. (Source=EPN News)
The head office included a rule on the violation of the contract which was not there when the contract was terminated. (Source=EPN News)

On the 11th, the planner filed a complaint with the National Human Rights Commission and the Financial Supervisory Service against the Review Committee and the entire management for the unfair dismissal. The FSS gave two weeks for voluntary mediation after which it will intervene and hear from the planner.

Meanwhile, Prudential Life Insurance is a life insurance company established in South Korea in 1989 by Prudential Financial in the United States and established a professional consultant position called a “life planner” for 4-year university graduates. The company has been recognized for its long history of creating lucrative professions out of what was once considered a part time job.

LPs across the country are paying special attention to this unprecedented controversy over the unfair dismissal of Prudential Life Insurance just when the company was incorporated into KB Financial Group. The layoff was predicted, however. In fact, KB Financial Group is undergoing restructuring by retiring employees with more than 20 years of service at both Prudential Life Insurance and KB Life Insurance.

At this time, Min Ki-shik, the newly appointed CEO, is known for specializing in laying off employees among insurance planners. While serving as the CEO of DGB Life Insurance in 2019, he closed 33 of 38 offices as part of a massive restructuring.

About 2,000 planners across the country who were outraged by the decision, formed an emergency field council and started a relay protest with up to 10 people on the 26th of last month in front of the head office located in Prudential Tower, demanding a meeting with the CEO. (Source=EPN News)
About 2,000 planners across the country who were outraged by the decision, formed an emergency field council and started a relay protest with up to 10 people on the 26th of last month in front of the head office located in Prudential Tower, demanding a meeting with the CEO. (Source=EPN News)
About 2,000 planners across the country who were outraged by the decision, formed an emergency field council and started a relay protest with up to 10 people on the 26th of last month in front of the head office located in Prudential Tower, demanding a meeting with the CEO. (Source=EPN News)
About 2,000 planners across the country who were outraged by the decision, formed an emergency field council and started a relay protest with up to 10 people on the 26th of last month in front of the head office located in Prudential Tower, demanding a meeting with the CEO. (Source=EPN News)

Controversy over contradiction as well as KB Life Insurance’s unfair forfeit

KB Life Insurance, another subsidiary of KB Financial Group's insurance division, has been at the center of controversy over unfair practices. As a result, the same criticisms were made against the controversy over the unfair dismissal.

Last November, we reported the fact that KB Life Insurance forced dismissed telemarketers to return their commission. Without an explanation or clear evidence, the company filed lawsuits against them solely on the grounds that they had signed the commission contract, and claimed a large amount of commissions as well as their interest.

It was revealed that the company recruited job applicants in their 20-30s who needed jobs for TMs and insurance planners and caused them to make incomplete sales without proper qualification or training. Then, they made profits using those who did not stay for a year, and blamed them for their dismissal drawing criticism for unfair practice.

As a matter of fact, KB Life Insurance recorded the highest incomplete sales rate (0.96%) in the life insurance industry in 2018, and the rate of registration for planners who have lasted more than a year was only 23.9%, which was far less than the industry average of 37.2%.

Shamelessness of Prudential Life Insurance PR Team

We asked him whether the planner really threw things at her calling her a “Yangahchi(a bully)” to her face. At that moment, the spokesman suddenly changed his story by saying that he never said it was the same FSS and did not respond to the question. (Source=EPN News)
We asked him whether the planner really threw things at her calling her a “Yangahchi(a bully)” to her face. At that moment, the spokesman suddenly changed his story by saying that he never said it was the same FSS and did not respond to the question. (Source=EPN News)

Regarding this controversy, we contacted the spokesperson of Prudential Life Insurance. He claimed that the dismissed planner used profanity and abusive language towards the FSS several times and asked us to write the article as it was. After listening to the claim, we were at risk of being accused for defamation but found out through a source that their claim was false.

When we brought up the matter again to the spokesperson for confirmation, he argued that the FSS was a female employee and she did not want to talk about the incident again after the traumatic experience. “Can you, as a woman yourself, tolerate that kind of abusive language and violence?” he asked the reporter, not providing sufficient evidence for his argument. He also claimed that there was a voice recording of the planner swearing at her. When we asked for it, he did not provide the recording claiming that it was personal information.

Lastly, we asked him whether the planner really threw things at her calling her a “Yangahchi(a bully)” to her face. At that moment, the spokesman suddenly changed his story by saying that he never said it was the same FSS and did not respond to the question.

Ko Myung-hoon, Reporter for EPN News