On March 12, 2021, the Financial Services Commission announced partial amendment to the Insurance Business Supervisory Regulations to introduce short-term micro-insurance companies.  The main contents of the amendment are as follows. 

1. Establishment of the insurance term for short-term micro-insurance

   • The insurance term for insurance products to be provided by short-term micro-insurance companies shall be limited to one year. 

2. Increase of the limit on foreign exchange positions of insurance companies

   • The limit on foreign exchange positions (the difference between assets and liabilities denominated in foreign currency) of insurance companies shall be increased from 20% to 30%. 

3. Verification of the adequacy of insurance companies′ liability reserves

   • Pursuant to the proposed amendment to the Presidential Decree of the Insurance Business Law, insurance companies meeting certain standards must submit a report regarding the adequacy of liability reserves to the Financial Supervisory Service (the ″FSS″) within three months following the end of the business year. 

   • Pursuant to the proposed amendment to the Insurance Business Supervisory Regulations, if the FSS determines that verification of the adequacy of an insurance company′s liability of reserves is necessary, the FSS may require the insurance company to have its liability reserves re-verified through an insurance rate calculator designated by the FSS.  

4. Disclosure of the operational status of an insurance company′s litigation management committee   

   • The operational status of the litigation management committee is added to the list of items that an insurance company must disclose on a semi-annual basis. 

[Korean version]