The South Korean financial regulator, Financial Supervisory Service (FSS) has launched an intensive consumer protection drive targeting the insurance industry, after a surge in life insurance complaints.
Life insurance complaints increased 22.8% y-o-y to 9,750 cases, while non-life insurance increased 8.2% y-o-y to 21,662 cases. The country’s dispute mediation applications also witnessed a massive surge with life insurers receiving 5,444 cases (up 67.4%) and non-life insurers 28,562 cases (up 57.9%).
The intensified regulatory action comes as consumer protection indicators deteriorated despite FSS Governor Lee Chan-jin's consumer protection mandate entering its second year. The FSS is now ordering insurers to prioritize consumer protection across the entire product lifecycle, from design through sales, operations, and after-sales management.
The FSS has formed a joint dispute rapid response team across insurance departments to conduct on-site inspections. Starting with KB Insurance and DB Insurance, the regulator plans to inspect 4 life insurers and 10 non-life insurers through next month end.
The FSS will hold meetings with insurance company CEOs in the fourth quarter to improve performance evaluation systems, including strengthening consumer protection indicators in key performance indicators for senior executives.