Providing Personal Information to Affiliated Insurance Companies After Acquisition... De Facto Insurance Solicitation Activities
Eun Sung-soo, Chairman of the Financial Services Commission, is delivering opening remarks at the Insurance Company CEO Meeting held on the 19th at the Financial Services Commission's main conference room in the Government Seoul Office Building, Jongno-gu, Seoul. Photo by Moon Ho-nam munonam@
[Asia Economy Reporter Oh Hyung-gil] In the future, insurance companies will no longer be able to use customer personal information collected through applications (apps) operated by banks or card companies. This creates a significant variable in the use of databases (DB) by financial-affiliated insurance companies.
According to financial supervisory authorities and the insurance industry on the 31st, as online non-face-to-face platforms operated by banks and others have increased recently, insurance companies had judged that if customers agree to provide personal information for marketing purposes to third parties, including affiliated companies such as insurance companies, they could use this to contact customers and utilize it for insurance sales.
However, the Financial Services Commission recently issued an interpretation that financial institutions are not allowed to acquire personal information online for insurance marketing purposes and provide it to insurance companies or others.
In other words, even if consumers agree to the use of personal information for marketing purposes on bank apps, insurance companies are prohibited from using it.
Until now, the authorities have considered that asking customers who visit bank counters whether they are interested in insurance and obtaining consent to provide personal information for the purpose of soliciting insurance contracts, then providing it to affiliated insurance companies, is effectively an insurance solicitation activity.
On the other hand, only methods such as direct face-to-face solicitation with insurance contract holders at designated locations within branches or using online websites to guide or explain insurance products to unspecified many people were permitted.
Since bancassurance, which allows banks to sell insurance, was permitted in 2003, it has accounted for a significant portion of insurance sales. From January to October last year, out of the initial insurance premiums of 5.0885 trillion KRW received by life insurance companies, bancassurance accounted for 3.8296 trillion KRW, or 75%.
However, a regulation has been applied that the share of one insurance company cannot exceed 25% of the annual insurance product sales recruited by financial institution insurance agencies. This was a measure to ensure fairness among recruitment channels and prevent concentration in insurance product sales.
The financial authorities viewed that obtaining consent to provide personal information online and providing it to insurance companies or financial institution insurance agencies could have the effect of circumventing the bancassurance regulation known as the '25% rule.'
An insurance industry official said, "Insurance sales have been conducted by obtaining consent for the use of personal information while conducting business at banks or card companies to secure customer DB," adding, "If customer information cannot be used in a situation where app usage is increasing, it will impose restrictions on insurance sales."
As of the end of June last year, the number of financial institution insurance agencies was 1,257. KakaoBank newly registered, increasing by one from the end of the previous year. The Agricultural Cooperative had the most with 1,134 companies, followed by savings banks with 79, securities companies with 20, banks with 16, and card companies with 8.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
