New regulations targeting insurance packages sold on TV shopping channels have seen fewer customers misled by false advertising.
The Korea Life Insurance Association has said that the measures implemented to counter misleading advertising introduced last year have helped curb what are widely known in South Korea as ‘incomplete sales’, a term that refers to items or insurance plans sold through deceptive advertising tactics including vague and imprecise clauses such as “We never ask or check” during TV commercials.
In the past, misleading marketing in the insurance industry in South Korea has been criticised for deliberately hiding terms and conditions that could put customers off purchasing insurance plans, while exaggerating and focusing on insurance benefits that not everyone is eligible for, reported Korea Bizwire.
Another criticism was aimed at the way insurance commercials were normally constructed, relying on parodying popular songs and promoting giveaways that come with insurance packages.
Against this backdrop, the Korea Life Insurance Association introduced a new measure that requires TV shopping programme hosts to mention and give equal coverage to details and the terms and conditions of the products they are hawking so as to reduce confusion and misunderstanding.
In 2015, one in every 100 private insurance plans sold on shopping channels was considered an incomplete sale. However, the figure was nearly halved, dropping to 0.56% last year, proving the effectiveness of the new regulations.
The improvements made in the insurance shopping industry follow regulations prohibiting TV commercials from airing giveaways in exaggerated terms, while a committee consisting of experts in various fields examined whether or not expressions and clauses used in commercials could mislead insurance buyers.
Other measures included providing education to insurance companies that had aired commercials in breach of the new regulations set in place since last year.