The Financial Services Commission and the Financial Supervisory Service announced insurance deregulation plans on Nov. 20.
According to the plans, each life or non-life insurance company can have a subsidiary handling a single product, such as pet insurance and driver insurance. In addition, specialized insurers can be founded to handle products, each with a period of up to one year and a benefit of up to 50 million won.
At present, an insurance company’s online marketing is limited if it shares the same parent company with an online-only insurance company. This limitation has been eliminated in the plans. Regulations related to non-face-to-face contact between solicitors and customers have been relaxed, and insurance terms and conditions no longer have to be read and recorded in the case of a video call.
Insurers’ derivatives trading ceiling has been eliminated from 6 percent of total assets. Their bond issuance limit has been raised, and liquidity ratio calculation has been changed in favor of them. At the same time, fines proportional to unfair profits have been introduced and disciplinary measures that planners may face have been diversified to include light ones such as warning as well as suspension and deregistration.
