Simple Insurance Agencies Now Allowed to Sell Both Life and Non-Life Insurance Products
Going forward, subsidiaries of insurance companies will be allowed to engage in the rental housing business. Simple insurance agencies will be able to sell not only non-life insurance but also life insurance and third-sector insurance products.
The Financial Services Commission announced on October 21 that the Cabinet had approved a revision to the Enforcement Decree of the Insurance Business Act containing these changes.
The scope of work for insurance company subsidiaries will be expanded. The range of activities that insurance company subsidiaries can engage in will now include rental business under the Special Act on Private Rental Housing. As a result, insurance companies will be able to supply long-term investment funds to meet the social demand for scaling up and improving the quality of long-term rental housing, and their subsidiaries will be able to carry out related work.
Simple non-life insurance agencies, which previously sold only non-life insurance products, will be reclassified as simple insurance agencies. The financial authorities have restructured the business scope and registration requirements to allow these agencies to sell life insurance and third-sector insurance products as well. In line with this, the Insurance Business Supervision Regulations and the Detailed Enforcement Rules for Insurance Business Supervision have also been revised to specify detailed insurance categories and insurance payout limits. As a result, real estate brokers or agents registered as simple insurance agencies will now be able to sell credit life insurance, and nursing hospitals will be able to sell accident insurance for falls.
The process for handling insurance-related complaints has also been streamlined. Among all financial complaints received by the Financial Supervisory Service, insurance complaints account for more than half, making up the largest proportion. The number of dispute complaints involving medical and legal issues has been increasing, causing the average processing time to lengthen. To address this, the Financial Supervisory Service will focus on resolving dispute complaints, while the Insurance Association will be authorized to handle and consult on simple complaints with no potential for disputes, such as basic inquiries or changes to premium payment methods. To ensure fairness in complaint handling, all complaints will be received through a single Financial Supervisory Service channel, and a dedicated organization will be established within the association for complaint handling, with the results to be publicly disclosed.
The recommended standard for the risk-based capital ratio has also been rationalized. In June, the financial authorities revised the Insurance Business Supervision Regulations to lower the recommended K-ICS ratio for subordinated bond early redemption and additional insurance product approvals from 150% to 130%. In the same vein, the K-ICS requirement for overseas subsidiary debt guarantees, which must be met by the parent insurance company, has also been eased to 130%.
The revised Enforcement Decree of the Insurance Business Act, which passed the Cabinet meeting, will take effect from October 28. An official from the Financial Services Commission stated, "In addition to this revision, we will continue to develop measures to improve the insurance industry system to enhance the benefits felt by financial consumers."
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