1. Reasons for Amendment
As the scope of self-regulation in the private sector, such as the insurance association and the institute of actuaries, has been expanded and business regulations have been mitigated to allow the provision of pre-managed goods/services as a follow-up measure to the Improvement of Regulations in Insurance Sectors, rigid sanctions that excessively restricted the business have been rationalized, and the Insurance Business Act has been revised in response to the implementation of the international accounting standards for insurance contracts (hereafter “IFRS17”) in 2023, this amendment aims to revise related provisions in the Enforcement Decree of the Insurance Business Act accordingly.
2. Major Provisions
A. Define terms based on IFRS17 (Article 3 (1))
As “deferred acquisition cost” was excluded from insurance company assets, remove the deferred acquisition cost from insurance company assets under the Insurance Business Act (amendments to Article 2 (14) of the Act).
B. Allow insurance solicitation using video calls, etc. (Article 43)
Allow insurance solicitation using video calls when the requirements for consumer protection are met, and in addition to voice recording, add a method to save it as an electronic document to the methods to secure/maintain policy holders’ answers and confirmation details when soliciting insurance subscription using phones.
C. Mitigate the obligation to prohibit from the provision of special benefits for pre-managed goods/services (Article 46)
Expand the range that may be provided as special benefits from the current 30,000 won to 200,000 won for pre-managed goods/services whose effect of reducing insurance risk is objectively/statistically verified.
D. Reorganize the provisions related to insurance company asset management ratio regulations (Articles 50 and 51)
As the limit on derivatives trading was removed (amendments to Article 106 (1) 10 of the Act), and the exceptions when the asset management limit ratio is exceeded were amended (amendments to Article 107 of the Act), reorganize the relevant provisions, and where the loss of the special account affects the general account, provide a basis for adding (amendments to the proviso to Article 106 of the Act) and applying it to the general account.
E. Provide grounds for the issuance of contingent bonds by insurance companies (Articles 58-2 and 58-3)
As the basis for the issuance of contingent bonds by insurance companies was newly inserted, establish specific standards such as issuance procedures (Articles 114-2 through 114-4 of the Act).
F. Allow the insurance association to publicize incidents of insurance frauds and pay bounties (Article 84)
Provide a legal basis for the insurance association to carry out tasks such as publicity related to insurance fraud prevention and eradication, and payment of bounties.
G. Reorganize senior actuary-related systems (Articles 95, 92-4, and 96 and Attached Table 9)
Provide personnel and work-related standards for supporting organizations that assist senior actuary work and reorganize the clauses following the upward legislation of the clauses related to senior actuaries, the establishment of administrative fines, etc. (Articles 181-2, 184-2, etc. of the Act).
H. Transfer actuary registration duties (Article 101)
Transfer the insurance actuary registration duties from the Financial Supervisory Service to the institute of actuaries.
I. Change the administrative fine for a violation of disclosure obligations of corporate insurance agencies (Attached Table 9 2 (x))
In cases of a small corporate insurance agency with fewer than 100 affiliated insurance solicitors, lower the upper limit of the administrative fine imposed for a violation of disclosure obligations from 10 million won to 5 million won.
