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Newsletter | November 2015, Issue 3
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INSURANCE
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Financial Regulators Establish a Joint Initiative to Improve Insurance Sales Channels
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On August 27, 2015, the Financial Services Commission (“FSC”) published a press release, announcing a joint initiative (the “Initiative”) with the Financial Supervisory Service (“FSS”), entitled “Step-by-Step Measures to Improve Sales Channels for Insurance Products” (the “Press Release”).
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According to the Press Release, the supervisory authorities will coordinate to improve insurance sales channels through the Initiative in the following three phases:
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Promote self-improvement efforts by the industry;
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Strengthen regulations concerning improper conduct that disrupts the insurance market system, and
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Implement a complete overhaul of the insurance sales channel system.
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Specifically, the Initiative seeks to:
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Realize the insurance industry’s self-improvement efforts through a voluntary agreement made in September 2015 to eradicate improper conduct in the insurance market, including excessive competition, and unfair sales practices by introducing a standardized consignment agreement for insurance agents;
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Amend the relevant supervisory regulations to support the insurance industry’s efforts to eradicate improper conduct in the market, and based on research projects, identify mid-to-long-term action items to be accomplished by the end of 2015; and
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Pursue fundamental and systematic improvements through 2016 (e.g., amendments to the Insurance Business Act, its subordinate regulations, and other relevant laws and regulations).
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