The Financial Supervisory Service (“FSS”) has announced its business plan for 2024, with the stated goal of achieving “financial stability, consumer-oriented financial policies, enhanced trust in the financial system, and dynamic growth.” We have summarized below some of the key aspects of the business plan which are related to the insurance industry.
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Financial Stability |
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Analyze interest-sensitive insurance products (e.g., retirement annuity, savings insurance plans), assess the related exposures based on maturity and interest rate scenarios, and enhance the monitoring of market conditions and movement of capital.
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Improve the insurers’ capital structure by putting additional importance on the capital adequacy ratios and solvency margin ratios of the Risk Assessment and Application System.
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Review the possible establishment of an independent committee for evaluation of the base assumptions of the insurance industry accounting standards.
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An independent private committee could be established to evaluate, set and manage industry wide accounting standards, including actuarial assumptions under the IFRS17. |
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Consumer-Oriented Financial Policies |
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Strengthen investigations of organized insurance fraud, involving brokers and hospitals, and other instances involving a rapid increase in insurance claims.
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Establish and operate a “Fair Financial Practices Promotion Committee” to enhance consumer protection.
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Monitor business practices possibly infringing on consumer rights and interests, including unreasonable rejection or adjustments of insurance claims. |
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Continue efforts to ensure prompt dispute resolution and prevention and consumer complaints.
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For prompt dispute resolution, establish an integrated dispute resolution mechanism that would categorize insurance disputes based on the relevant issues, and generate relevant case precedents and standard responses. |
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Provide additional consumer guidance on medical conditions which are subject to frequent disputes, including relevant precautions, dispute mediation precedents and standards. |
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Develop car insurance policies with supplementary coverage provisions to enhance coverage standards for pets. |
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Develop insurance policies with special premium deferment provisions applicable for certain situations, such as loss of employment or childbirth. |
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Enhanced Trust in the Financial System |
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Conduct joint-audits of general agencies (“GAs”) and parent insurers on a regular basis, and conduct regular audits on large-scale GAs.
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Confirm that insurers have adopted appropriate CEO succession plans and board of directors operations and establish practical accountability standards.
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Implement measures to strengthen internal controls for prevention of financial incidents.
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Dynamic Future Growth |
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Review the possibility of allowing insurers, and their subsidiaries, to engage in an expanded scope of ancillary businesses, including healthcare services, digital and online business.
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Amend regulations to address new types of online advertising (e.g., SNS based ads) that are being introduced.
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Clarify and establish standards and terms and conditions to address the increasing collaboration between big-tech companies and financial institutions in financial products and services, including standards for the allocation of duties and responsibilities.
