South Korean regulator the Financial Services Commission (FSC) has announced a new policy framework for re/insurance business.
The new framework includes initiatives to boost consumer confidence, improve the role of insurance as a social safety net, promote digital innovation, and improve business management practices.
The FSC explained that the initiatives would “set forth a mid- to long-term direction of the insurance industry,” with specific implementation plans to be determined later.
Firstly, the FSC intends to facilitate the entrance of new players to the Korean re/insurance market to promote competition and innovation, including new types of specialist insurance businesses, helped by a more flexible licensing scheme.
The regulator will also revise rules to expand the availability of digital sales channels by promoting the use of digital, AI-based and contactless insurance sales channels and establishing standards on online platform services.
Next, it will look to bolster consumer protection by tightening requirements on the sales process for risky products, strengthening the accountability of general agents (GAs), and digitalising the damage claiming process.
Other digital aspects of the framework include strengthening foundations for the application of big data and platform services in insurance business and promoting the provision of digital health care-related services by insurers.
On business management practices, the FSC will work on an advancement of the accounting system through a smooth transition to IFRS 17, encourage insurance businesses to boost their ESG standards, and improve management practices that focus on short-termism.