Consideration of Allowing Entry to Platform and MyData Operators
[Asia Economy Reporter Oh Hyung-gil] Big tech and fintech companies such as Naver Financial and Kakao will also be able to register as insurance agencies.
As the corporate agency (GA) market is rapidly growing, insurance seller companies are about to launch amid the recent trend in the insurance industry of "separation of manufacturing and sales (Je-pan separation)." A "big bang" is anticipated in the insurance agency market.
The Financial Services Commission recently announced in its "2021 Financial Industry Bureau Work Plan" that it is considering allowing platform operators such as electronic financial businesses and MyData operators to register as insurance agencies and plans to ease their entry requirements.
The Financial Industry Competition Evaluation Committee analyzed that insurance product comparison, sales, and brokerage services by platform operators have various positive effects, including promoting competition in the insurance industry and expanding consumer choice.
According to insurance regulations, insurance agencies must have at least 10% of their employees as insurance planners, but this regulation is designed with traditional face-to-face sales in mind and is not suitable for platform operators, according to financial authorities.
Accordingly, if the insurance services of platform operators are considered "solicitation," the related system will be revised so that platform operators can qualify as solicitors and conduct business.
A regulatory framework for platform-based insurance services is planned to be established within this year, starting with clarifying the legal nature of insurance services and preparing model regulations to enable reasonable supervision.
The financial authorities plan to allow electronic financial businesses and other platforms to enter the insurance agency market, expanding sales channels for simplified small insurance products. They also plan to actively apply regulatory exemptions for consumer-tailored insurance and small, simple insurance products through the financial regulatory sandbox.
Currently, electronic financial businesses include Naver Financial, a subsidiary of Naver, Kakao Pay, and Viva Republica, which operates Toss. As for MyData operators, 28 companies including KB Bank and Mirae Asset Daewoo, which received full approval from financial authorities last month, as well as Bomep, Bank Salad, and NHN Payco, are included.
Platform operators are also accelerating their entry into the insurance industry.
Kakao Pay had been promoting the establishment of a digital non-life insurance company with Samsung Fire & Marine Insurance since 2019, but cooperation was halted last year due to disagreements during the preliminary approval application process.
In January of this year, Kakao Pay applied to the financial authorities for preliminary approval to establish a digital non-life insurance company. They must complete procedures such as preliminary approval, corporate establishment, and final approval going forward.
Naver Financial attempted to promote a car insurance quote comparison service last year but was stalled due to commission conflicts with non-life insurers. Currently, it operates a specialized insurance corporation, NF Insurance Service, and is expected to start a corporate insurance agency (GA) business specializing in insurance sales by contracting with insurance companies using this entity.
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