|
|
|
|
|
|
|
Newsletter | August 2014, Issue 3
|
|
|
|
|
|
|
|
|
|
|
INSURANCE
|
|
|
|
|
Amendments to the Presidential Decree of the Insurance Business Act and Insurance Business Supervisory Regulations
|
|
|
|
On April 15, 2014, certain amendments to the Presidential Decree of the Insurance Business Act and Insurance Business Supervisory Regulations (the “Amendments”) were promulgated. We provide you with a description of some of the more noteworthy changes under the Amendments.
|
|
|
|
Protection of Insurance Consumers
|
|
|
|
The obligation to check duplicate insurance subscriptions when soliciting medical insurance has been expanded to include subscriptions for group insurance.
|
|
|
|
Records of evidentiary documents, such as signatures and telemarketing recordings, must be kept and maintained when changing insurance policies.
|
|
|
|
The regulations on tying loans and insurance products sales (which currently prohibits the sale of insurance products of which monthly premium exceeds 1% of the loan amount to a borrower during a one month period prior to and after providing the loan) have been expanded to prohibit insurance products sales to related parties of a small and medium-sized borrowers, which include officers and employees of the borrower and their family members.
|
|
|
|
Reinforcement of Insurance Advertisement and Telemarketing-Related Regulations
|
|
|
|
For audio-visual advertising, the volume and speed of the speech informing policyholders of disadvantageous terms, such as coverage exclusions, limits of insurance payment, etc., are required to be identical to the volume and speed of speech as read in the main advertisement, and such advertisement must be posted on the Internet homepage of the insurer.
|
|
|
|
For telemarketing, insurers and insurance solicitors must (i) inform policyholders of how to access voice recordings after execution of insurance contracts; (ii) inform policyholders of their consumer rights in case of mis-selling (i.e., cancellation of contract, etc.), and (iii) discontinue the conversation with a customer if the customer expresses no desire to continue the call or to subscribe to insurance.
|
|
|
|
Insurers are required to perform quality assurance for at least 20% of the number of insurance contracts solicited through telemarketing per month to confirm whether sales were made in accordance with standard scripts (this obligation is currently provided in the Best Practices for Telemarketing).
|
|
|
|
Reinforcement of Personal Information Protection
|
|
|
|
The Korea Insurance Development Institute (“KIDI”) will allow policyholders to (i) access their own insurance-related personal information maintained by KIDI and status of information sharing to third parties via the KIDI website and (ii) to request KIDI to refrain from processing his/her personal information by KIDI and insurers (the so-called “Do Not Call” service, which is currently provided only to auto insurance customers and policyholders).
|
|
|
|
Deregulation of Asset Management
|
|
|
|
The prior approval by the FSC requiring establishment of an overseas subsidiary for the purpose of investing in overseas real property has been replaced with a prior report to the FSC.
|
|
|
|
Other Amendments
|
|
|
|
Reinsurance assets reserved in Korea are now recognized as assets to be held by a domestic branch of a foreign insurance company in Korea.
|
|
|
|
Specific levels of administrative fines have been set for each type of offense under the IBA.
|
|
|
|
The Amendments have taken effect as of the promulgation date except for the following amendments, which will be effective six months after the date of promulgation: (i) obligation to check duplicate subscriptions for group insurance, (ii) obligation to keep and maintain records of evidentiary documents in case of changing an insurance policy, (iii) requirement regarding the volume and speed of speech for audio-visual advertising, and (iv) reinforcement of personal information protections (the so-called “Do Not Call” service).
|
|
|
|
|
|
Back to Main Page
|
|
|
|
|
|
If you have any questions regarding this article, please contact below:
|
|
|
|
|
|
|
|
For more information, please visit our website:
|
|
|
|
|
|
|
|