Asian News - South Korea: Regulator steps up moves to revitalise insurance mart
Source: Asia Insurance Review | Dec 2015
Korea’s top financial regulator has announced that it will give local insurers free rein to decide insurance premiums on their own, in a bid to promote price competition in the lethargic market.
The Financial Services Commission (FSC) said it will from the beginning of 2016 abolish guidelines for setting insurance premiums, reported the Yonhap News Agency. However, for medical and car insurance policies, the FSC will give more room to insurers to raise premiums by 35% from 2017, up from the current 25%.
Also to promote competition, online insurance markets will be launched next year and Internet portals will provide price-comparison services, the regulator added.
The financial authorities require local insurers to set aside reserves to meet insurance claims. The Financial Supervisory Service (FSS), the financial oversight body, announces the percentage to be set aside every year. These guidelines aimed at maintaining the financial health of insurance companies and strengthening rights of policyholders. But one outcome is that they have led to insurers marketing uniform insurance products, said an FSC official.
Previously, the FSC had said that it was considering several measures to stimulate the stagnant insurance market, including loosening reporting requirements for new products. Insurance companies will also be given greater freedom in their asset management activities.