Amendments to the Insurance Business Act, aimed at restricting market entry by insurance solicitors (insurance planners, agents, and brokers) and executives of corporate insurance agencies (GAs) and insurance brokers who have a history of insurance fraud, passed the plenary session of the National Assembly on August 20, 2026. The main provisions of the amendment are as follows:
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Expansion of Grounds for Disqualification and Extension of Disqualification Period
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Previously, individuals who committed violations of the “Act on the Protection of Financial Consumers” were restricted from becoming insurance solicitors or executives of corporate GAs or corporate brokers. This restriction has now been expanded to encompass violations of any “financial-related laws.”
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The referenced “financial-related laws” include the Act on the Protection of Financial Consumers, the Special Act on the Prevention of Insurance Fraud, Article 347 of the Criminal Act (Fraud Using Insurance Contracts), and the Act on the Regulation of Conducting Fund-Raising Business Without Permission.
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If an executive of a GA has been sentenced to a fine or more severe punishment for violating the Insurance Business Act or other financial-related laws, the period during which such person is restricted from being appointed as an executive is increased from the current three (3) years to five (5) years.
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Introduction of Reporting Obligations
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Where an insurance company, or other relevant entity, becomes aware that one of its insurance solicitors has been sentenced to a fine, or received a suspended sentence for imprisonment, or more severe punishment, for violating the “Insurance Business Act” or other financial-related laws, it must report such fact to the Financial Services Commission.
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Grounds for Imposition of Administrative Fines in Lieu of Business Suspension
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Even where there are grounds to suspend the business of a corporate insurance agency or insurance broker, if it is deemed necessary to protect the livelihood of the insurance solicitors affiliated with such agency or broker, an administrative fine may be imposed in lieu of a business suspension.
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The amended law is scheduled to take effect six months after its promulgation.
[Korean Version]
