SOUTH KOREA: REG­U­LA­TORS TO CLAMP DOWN ON IN­SUR­ANCE AGEN­CIES

Insurance - - INDUSTRY UPDATES -

Source: Asia In­sur­ance Re­view, 23 June 2014

Fi­nan­cial reg­u­la­tors will tighten con­trols on the coun­try's 30,000 in­sur­ance agen­cies to pro­tect cus­tomers from un­fair sales prac­tices such as the pro­vi­sion of mis­lead­ing in­for­ma­tion. The Fi­nan­cial Su­per­vi­sory Ser­vice (FSS) and Fi­nan­cial Ser­vices Com­mis­sion (FSC) said that they will hold in­sur­ance agen­cies more li­able for dam­age to cus­tomers caused by im­proper sales, re­ported the Korea Times. Also, the reg­u­la­tors are con­sid­er­ing a plan to force agen­cies with more than 100 sales­peo­ple to reg­is­ter with the In­sur­ance Agency As­so­ci­a­tion to tighten su­per­vi­sion of their op­er­a­tions. The agen­cies part­ner with var­i­ous in­sur­ers to sell their prod­ucts. They are gain­ing pop­u­lar­ity in South Korea as through them, cus­tomers can com­pare the ben­e­fits of the prod­ucts from var­i­ous in­sur­ance firms. Cur­rently, about 30,000 agen­cies op­er­ate na­tion­wide and their in­flu­ence has been grow­ing in re­cent years. The agen­cies, first in­tro­duced in 2000, have steadily grown, and now con­trib­ute 20% of to­tal sales in the in­dus­try. More than 40% of non-life in­sur­ance poli­cies are sold by agen­cies, ac­cord­ing to the reg­u­la­tors. In par­tic­u­lar, small in­sur­ance com­pa­nies rely heav­ily on the agen­cies. How­ever, as the num­ber of agen­cies has been on the rise, only 40 agen­cies or so have 500 sales­peo­ple or more, while the rest of them have fewer than 100 fi­nan­cial plan­ners. Small-sized agen­cies are ill-pre­pared for ed­u­cat­ing their fi­nan­cial plan­ners about cus­tomer ser­vice with the re­sult that the plan­ners sold prod­ucts to cus­tomers with­out pro­vid­ing the lat­ter with due in­for­ma­tion.

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.