To keep in step with the digitalization era and to improve financial regulations, the Financial Services Commission (the “FSC”) established the Financial Regulatory Innovation Committee (the “Committee”) and announced during its first meeting on July 19, 2022, the specific direction of financial regulatory innovation.  The Financial Regulatory Innovation Conference is a private organization composed of 17 private-sector experts representing the economy, finance, digital, legal and media sectors to improve existing financial regulations.  This move is to better adapt to the environment that rapidly digitalizes, with new digital technologies combining with finance and new, unconventional players entering the sector.

At the first meeting, the following four major areas were selected as the key targets: (i) promoting digital transformation; (ii) building infrastructure using new technologies; (iii) advancing the capital market; and (iv) improving financial supervisory administration.  More specifically, 36 tasks were selected from suggestions taken from eight financial industry associations, including the Korea Life Insurance Association and the General Insurance Association of Korea.  Among them, the following are the eight detailed tasks for the insurance industry.

First, to enable insurers to enter IT and platform-related businesses and actively invest in new technologies, “(i) Relaxation of Business Restrictions on Insurers’ Subsidiaries” and “(ii) Relaxation of Regulations on Insurers’ Ancillary Businesses” were selected as detailed tasks in connection with the relaxation of the current regulations on the separation of finance and non-financial industry.  In addition, “(iii) Relaxation of the One-Company-One-License System” and “(iv) Rationalization of Regulations on Major Shareholders such as the Scope of Specially Related Persons” were also selected as additional tasks to expand insurers’ business.

Meanwhile, “(v) Improvement of Insurance Marketing Regulations regarding the Use of Digital Technology” and “(vi) Assessment of Insurance Product Brokerage through Online Platforms” were also selected as detailed tasks, so that insurance can be solicited and insurance products can be brokered in a digitalized manner.  To enable insurers to use a wide range of consumer information they already have for their services, “(vii) Insurance Services Through Use of Non-Financial Data” was also selected.  Finally, “(viii) Promotion of Insurance Companies’ Healthcare Services” was selected as a detailed task to create synergy with related healthcare services.

For these tasks, the working division of the Committee will assess possible ways for improvement, and the Committee will deliberate on and finalize the improvement measures.  The Committee plans to closely communicate with the market throughout the process and is open to other suggestions for regulatory improvements.