(1) Reasons for Proposal

There have been opinions that non-life insurance companies have insufficient capacity for risk assessment and insurance underwriting because they have been mainly doing the business of long-term and savings insurance and relying customarily on reinsurance; for this reason, the Amendment aims to strengthen the original function of non-life insurance, which is risk coverage, and promote the competition of insurance premium and service.

(2) Major Provisions

A. Newly insert the definitions of household insurance and corporate insurance (Article 1-2)

B. Rationalize regulations concerning sales proportion of insurance agents of financial institutions (Article 4-15 (2))

Calculate the sales portion of general non-life insurance with primary policy premiums paid based upon a monthly basis to improve the difference of calculation methods for sales proportion between life and long-term non-life insurance and general non-life insurance

C. Provide reinsurance management standards and internal control standards (Article 7-6 (1), Article 7-12-2 (1) ~ (4))

Require insurance companies to formulate reinsurance strategies and internal control standards and to receive the approval of the Risk Management Committee to reflect the Insurance Core Principles (ICP), internationally recommended standards related with the reinsurance risk of insurance companies, presented by the International Association of Insurance Supervisors (IAIS)

D. Introduce the minimum retention rate of general non-life insurances (Article 7-12-2 (5))

Introduce the standards of minimum retain rate (10%) for each individual contract for general non-life insurances to enhance the underwriting function for the corporate insurance of domestic non-life insurance companies

E. Provide a legal basis for reinsurers' listing system (Article 7-12-2 (6))

Provide the legal basis for the “listing system for qualified reinsurance companies” being operated by the Korea Insurance Development Institute for the convenience and safety of reinsurance transactions

F. Apply non-statistical rate and allow the discount or premium of reference net premium rates (Article 7-73 (2))

Clarify that for corporate insurances and some household insurances, insurance rates other than statistical rates can be used; and provide a ground for using reference net premium rates by discounting or raising.

G. Allow the reinsurer net premium method when executing a reinsurance contract (Article 7-73 (3))

Ensure that the reinsurer net premium method is available for executing a reinsurance contract to promote the competition for operating expense and market price differentiation between insurance companies

H. Establish the obligations for the insurance premium rate calculating institution to disclose the results of statistical analysis of corporate insurance and to confirm the question of assent to the credit information when providing insurance information (Article 9-5-4 (1), (3))

Require the insurance premium rate calculating institution to publish annually the analysis report on the integrated corporate insurance statistics on its website, and to confirm the question of assent if personal credit information is included when providing the information held to insurance companies

I. Provide a rationale that the insurance premium rate calculating institution may provide corporate insurance information and operate an information system (Article 9-5-4 (2))