"After 20 Years... Bancassurance '25% Rule' to Be Relaxed"

Financial Services Commission Designates Innovative Financial Services
First improvement to bancassurance sales ratio regulation in 20 years
New services to enhance consumer choice and convenience

The 'bancassurance sales regulation,' which has restricted banks from selling more than 25% of a specific insurer's products, will be improved for the first time in 20 years.

On the 16th, the Financial Services Commission held a regular meeting and announced the designation of 96 new innovative financial services, including the 'Improvement of Sales Ratio Regulations for Financial Institution Insurance Agencies.'

The core of this innovative financial service is to relax the sales ratio regulations applied when financial institution insurance agencies (bancassurance) such as banks solicit insurance products.

The sales regulation that prohibits financial institution insurance agencies from selling more than 25% of a specific insurer's products has been in place for about 20 years since 2005. To comply with this regulation, financial institution insurance agencies have sometimes artificially suppressed sales or recommended other products even when consumers wanted certain products.

Accordingly, the Financial Services Commission decided to relax the regulation ratio to between 33% and 75%, considering factors such as the number of participating insurance companies. A Financial Services Commission official emphasized, "By improving the sales ratio regulation, we aim to recommend the optimal insurance products to consumers and strengthen consumer choice." They added, "We will also exclude policy-type insurance, such as flood and windstorm insurance, from the sales ratio calculation to promote policy-type insurance."

A fund product comparison and recommendation service applied for by five companies, including Naver Financial, was also newly designated. As a result, online platforms can now provide services that compare and recommend various financial companies' fund products suitable for financial consumers by utilizing diverse data.

Additionally, Shinhan Bank and Shinhan Savings Bank's 'Shinhan Win-Win Debt Refinancing Service' was newly designated as an innovative financial service, allowing savings bank customers to refinance existing credit loans through screening at banks.

Services that enhance financial consumer convenience were also newly designated, including a multilingual support service for domestic foreign residents to mediate affiliated account openings by InainPay and Shinhan Bank; an affiliated account service between KB Kookmin Bank and SSG.com shopping mall and banks; and a service by four companies including Hana Bank to list public offering funds on the exchange for trading like stocks.