|
|
|
|
|
Newsletter | December 2013
|
|
|
|
|
|
|
INSURANCE |
|
|
|
Changes in the Operating Expenses System for Savings-related Insurance Products, including Pension Insurance |
|
|
|
On September 17, 2013, the Financial Services Commission (the “FSC”) issued a notice of proposed amendments to Korea’s insurance supervisory regulations to change the operating expenses system of savings-related insurance products (the “Proposed Regulatory Change”). The Proposed Regulatory Change is a follow-up measure regarding plans announced by the FSC on August 6, 2013 to vitalize private pension insurance products in Korea. If promulgated, the Proposed Regulatory Change could result in an increase in maintenance costs related to the sales of savings-related insurance products, such as pension insurance. The details of the Proposed Regulatory Change are as follows:
|
|
|
|
Expansion of Installation Payment Ratio for Commissions: The percentage of commission which can be paid in installments after the sale of savings-related insurance products shall be gradually increased
|
|
|
|
| Classification |
Current |
Year 2014 |
Year 2015 |
Year 2016 |
| General Channel |
30% |
40% |
50% |
|
| Life Annuity* |
25% |
25% |
35% |
45% |
| Bancassurance Channel |
30% |
60% |
70% |
|
| Cyber-Mall Channel |
30% |
80% |
100% |
|
|
|
|
|
* There will be a one-year enforcement grace period for life annuities, as the sales of such products require more effort.
|
|
|
|
Differences in Costs for Sales of Insurance Products: Compared to the general channel, the costs for selling insurance products through bancassurance and cyber-mall channels shall be lowered by 60% in 2014 and 50% in 2015, respectively.
|
|
|
|
The FSC expects the Proposed Regulatory Change will increase consumer benefits by increasing refunds payable upon insurance contract terminations. |
|
|
|
Back to Main Page |
|
|
|
|
|
If you have any questions regarding this article, please contact below: |
|
|
|
|
|
|
|
For more information, please visit our website: |
|
|
|
|
|
|
|