The Financial Supervisory Service (the "FSS") has announced its business plan for 2022, which aims to "achieve financial stability, financial innovation, and protection of financial consumers". Key points related to the insurance industry are as follows:
1. Harmonization of Ex Ante and Ex Post Facto Financial Supervision
Request a financial company to designate information channel personnel (Liaison) to promote business meetings and interviews with the FSS audit team, etc.
Develop risk index to preemptively identify risk factors and signs of problems from investments in foreign alternative assets
Strengthen oversight over the entire process of financial products, including development, sale and follow-up management, for preventive supervision on consumer protection:
- Specify the review criteria and strengthen the review process to prevent mis-selling
- Evaluate the effectiveness of the insurers’ product committee and their compliance with internal control standards on product development
- Check mis-selling factors by operating a monitoring information system for financial products
- Upgrade the Consumer Protection Monitoring System to prevent consumer harm, including unfair conversion of insurance contracts and non-payment of insurance proceeds
- Introduce a system to evaluate general agencies’ internal control operations and review measures to strengthen sales responsibility
Establish an audit system to strengthen ex ante supervision
- Reorganize the audit system from current comprehensive/sector audits to regular/ad hoc audits where periodic in-depth diagnosis and risk prevention functions are added
- Introduce a self-audit request system to request financial companies to conduct a self-audit
2. Support for the Future of the Financial Industry
Prepare working-level guidelines that reflect the characteristics of each type of AI-based financial service
In order to promote competition and innovation, stabilize finance, and achieve consumer protection following Big Techs’ entry in the financial industry, review measures to overhaul the supervisory system for each financial industry and prepare measures to supervise Big Techs in Korea.
- In the case of the insurance industry, review the systemic basis for compensation for motor vehicle accidents, in preparation for commercialization of autonomous vehicles
Encourage financial companies to conduct self-inspection of new risks to arise in the process of digital conversion, such as establishing an agile organization, introducing metabus, and seeking third party outsourcing service providers
Encourage improvement of online non-face-to-face consulting and sales service through analysis and inspection of risk factors for consumer protection
Devise a plan to diversify the structure of pension products, such as pensions for those with medical history, and expand pension tax support and review the need to introduce a subsidy system to strengthen the social safety net function of private pensions
In order to enhance the sustainability of health insurance, continue discussions and consultations with the health authorities on matters such as prevention of leak from over-medical care and improvement of coverage, and introduce an online contract conversion system to promote the conversion to health insurance contracts for 4th generation.