On December 31, 2020, the Eastern Seoul Branch of the national Employment and Labor Office in Seoul issued a certificate of labor union to the Branch Union of Insurance Planners of the Korean Finance & Service Workers’ Union (also known as the Korean Insurance Planner’s Union or “KIPU”), which is a sub-chapter of the Korea Confederation of Trade Unions.

The KIPU has been recognized as a labor union under the Trade Union and Labor Relations Adjustment Act 16 months after the initial filing of establishment with the Ministry of Employment and Labor (the “MOEL”) on September 9, 2019.  After the MOEL had refused in 2000 to accept the filing of the Korean Insurance Solicitors’ Union (KIPU’s predecessor), the Seoul Metropolitan Government accepted the report of establishment of the labor union in April 2019.  However, this is the first case that the MOEL has accepted such report at a national level.  As the KIPU has now gained its legal status as a recognized union, it is now entitled to the three basic labor rights: right to organize, right to enter into collective bargaining and right to take collective action.

The KIPU announced that it plans to execute a collective agreement with insurance companies through collective bargaining and make efforts to change policies or contracts that contain unfair terms on termination of employment or payment/claw-back of commissions to the prejudice of insurance planners.

In addition to the official recognition of the KIPU, amendments to the Employment Insurance Act that require unemployment insurance and workers’ compensation coverage for special type workers such as insurance planners are scheduled to take effect from July 2021.  As a result, insurers should monitor further developments and prepare for the relevant changes going forward.