(1) Reasons for Proposal

To enhance the competitiveness of insurance companies and promote innovation in the insurance industry, this amendment aims to rationally reduce the burden of reporting in relation to the concurrently run or incidental business; provide the basis for the joint inspection consultations between the head of the competent central administrative agency of the mutual aid business and the Financial Services Commission; impose administrative fines for the violation of obligations to confirm the conclusion of dual contracts by an insurance company, etc; and otherwise improve and supplement some of the shortcomings that have emerged from the operation of the current system.

(2) Major Provisions

A. Reduce the burden of reporting concurrently run or incidental business of insurance companies (Article 11 and the proviso of Article 11-2 (1) newly inserted) 

To reduce the reporting burden caused by the addition of concurrently run or incidental business of insurance companies, allow any insurance company to be carried out concurrently run or incidental service without separately reporting it if the company concurrently runs a financial service that requires approval/permission, etc., or if it intends to perform a concurrently run business, such as those already reported by other insurance companies.

B. Simplify the subsidiary ownership approval process for insurance companies (Article 115) 

To reduce the burden of duplicate approval related to subsidiary ownership, allow any insurance company that mainly do business related to asset management to own subsidiaries after reporting to the Financial Services Commission within a certain period, deeming that the company has been approved if it has obtained the establishment approval/permit with fulfilling the requirement for matters concerning ownership of stocks from the Financial Services Commission in accordance with the Act on the establishment of subsidiaries.

C. Mandate the external verification related to adequacy of liability reserves (Article 120-2 newly inserted) 

For stable insurance payment, require that insurance companies of a certain size or more, considering the characteristics of the type of insurance or the size of total assets, are verified by a premium rate calculation agency or independent actuarial business operator for the appropriateness of liability reserves.

D. Establish the obligation to notify insurance policyholders when resolving the transfer of an insurance contract (Article 141 (1)) 

To extensively protect policyholders, in addition to notifying the substance of the transfer of an insurance contract within two weeks from the date of the resolution to transfer the contract, require individual policyholders to be notified of such fact.

E. Expand the scope of consultations related to the mutual aid business and provide a basis for requesting joint inspection consultations (Article 193 (1) and (3) newly inserted) 

To improve the financial soundness of the mutual aid business, allow the Financial Services Commission to request consultations on the financial soundness from the head of the central administrative agency related to the mutual aid business, and allow the head of the central administrative agency to request consultations on joint inspections with the Financial Services Commission if it is necessary to maintain the financial soundness of the mutual aid business.

F. Provide the basis for imposing administrative fines for the violation of the obligation to confirm the conclusion of dual contracts by an insurance company, etc. (Article 209 (1) through (3)) 

To ensure the effectiveness related to the obligation to confirm the conclusion of dual contracts, if an insurance company, etc., does not confirm whether to have an insurance contract that guarantees the same risk before soliciting an insurance contract or fails to immediately notify the client of such confirmation, impose administrative fines not exceeding 50 million won, 20 million won, or 10 million won on the relevant insurance company, its employees, and any other persons engaged in the solicitation.