In March 2026, Korea’s Financial Supervisory Service (the “FSS”) held the “2026 Insurance Sector Financial Supervision Briefing,” where it announced its supervision and audit policies for the insurance sector.

During the briefing, the FSS indicated that its policies will focus on enhancing the rights and interests of financial consumers and strengthening the soundness of the insurance sector. The following is a summary of the key policies announced for 2026.
 

• Establish a consumer-protection-focused framework for supervision of insurance products

• Strengthen insurers’ internal controls and enhance the FSS’s dispute-resolution capabilities

• Improve the framework for everyday insurance products (e.g., indemnity and auto insurance)
   

• Build a foundation for fair competition through transparent information disclosure

• Continue efforts to foster a sound insurance market
   

• Enhance insurers’ risk management framework

• Improve insurance liability valuation practices through actuarial inspections

• Systemize capital regulations to support sustainability of the insurance industry
   

• Foster innovation-driven growth in the insurance industry and enhance social value

• Enhance risk management to better respond to internal and external changes
   

• Conduct joint examinations by dispute-resolution, actuarial and audit departments

• Maximize synergies among complaint/dispute-handling, supervision and audit functions

• Enhance feedback and information-sharing between supervision and audit functions
   

• Shift examination priorities from ex post sanctions to preventive measures

• Prioritize consumer benefits when selecting targets and topics for planned or thematic examinations
   

• Identify and remedy risk factors that can cause consumer harm or other risks

• Promote consumer-centered corporate culture and operational practices
   

• Improve communications to enhance compliance with enforcement actions and effectiveness of examinations

• Promote a consultative framework for internal audit functions as well as partnership meetings and meetings with the board of directors
   

• Evaluate the role of product committees and Chief Consumer Officers (“CCOs”)

• Assess activities/practices that disrupt market order such as excessive sales commissions

• Monitor the overall premium review and payment functions
   

• Identify root causes of improper sales activities by reviewing insurers’ controls over GAs, including compliance with third-party risk management guidelines, and expanding joint (insurance company-subsidiary GA) audits

• Monitor irregular sales practices by GAs misusing policy loan consulting arrangements

• Verify protection of consumers’ right to choose, including comparative product explanations and the right to withdraw insurance applications
   

• Strengthen premium reserve adequacy inspections, including through detailed reviews of actuarial assumptions

• Continued management of exposures to high-risk assets

• Enhanced monitoring of latent risk factors affecting financial soundness
   

The FSS has consistently emphasized its aim to enhance consumer protection and strengthen the insurance industry’s fundamentals. Specifically, the FSS highlighted the need to enhance internal controls across the entire insurance policy lifecycle—from design and structuring, to sales, maintenance, and post-sale management—while tightening the audit of actuarial processes, enhancing internal controls for GA channels, and managing financial soundness in line with updated standards.

This regulatory policy stance is likely to be reflected in the FSS’s 2026 supervisory inspections and audits, and coordinated, multi-department joint audits are likely. Consequently, industry participants should also strengthen internal cross-functional collaboration and internal controls frameworks, while taking note of trends from future audits by the supervisory authority.
 

[Korean Version]