In this case, a proposed amendment to the Enforcement Decree of the Insurance Business Act (the “Proposed Amendment”) required insurance companies to hire appointed actuaries as their officers/employees in accordance with the IFRS17 International Financial Reporting Standards.  Kim & Chang successfully prevented the implementation of this regulatory requirement by explaining the issues associated with the direct employment of appointed actuaries to the relevant financial regulators.

On July 5, 2021, the financial regulators announced a legislative notice of the Proposed Amendment to include matters concerning the capital adequacy of insurers in accordance with the introduction of IFRS17.  Article 95 (1) Item 4 of the Proposed Amendment stipulated that an insurer must hire appointed actuaries as its officers/employees, mandating that actuaries should hold permanent positions even though previously their roles and responsibilities could be outsourced.

In response to the above, our firm proactively explained to the financial regulators that requiring an insurer to hire appointed actuaries (i) is legally contradictory with respect to the Insurance Business Act, which allows the roles and responsibilities of an appointed actuary to be outsourced to any external party, and (ii) is unnecessary given the nature of the business conducted by a foreign reinsurer’s branch in Korea.

As a result, Article 95 (1) Item 4 of the Proposed Amendment has been excluded from the Enforcement Decree of the Insurance Business Act that took effect on January 1, 2023.  Our firm successfully achieved the desired results by pointing out the contradictions in the regulatory requirement even though a legislative notice of the Proposed Amendment had already been announced.