NongHyup Life Insurance Faces Controversy Over Resuming GA Channel Briefing Sales

Recently, NongHyup Life Insurance has come under scrutiny for reactivating briefing sales through the General Agency (GA) channel. The company is accused of favoring certain GAs, which has sparked criticism regarding the fairness of regulatory enforcement by financial authorities. This article explores the details surrounding the controversy and NongHyup Life’s stance on the issue.

NongHyup Life Insurance has recently boosted sales through the GA channel by reactivating briefing sales, leading to a significant increase in revenue. In July 2024, the company’s protection-type insurance sales through the GA channel reached 1.65 billion KRW in monthly initial premiums, a 59.4% increase compared to the previous month. This surge marked the highest growth rate among life insurers.

However, some within the GA industry argue that this sharp increase in performance is due to the resumption of briefing sales. It is claimed that since the beginning of this year, NongHyup Life has been pushing briefing sales with specific GAs, significantly boosting its revenue. In the past, NongHyup Life consistently secured a top position in GA channel sales through aggressive briefing sales, but its revenue plummeted following regulatory warnings from the Financial Supervisory Service (FSS) in 2015, and had not fully recovered until early this year.

Earlier this year, an executive from NongHyup Life, who had previously led the charge in briefing sales, was appointed as the head of the organization that continued to drive these efforts. It is also reported that the company actively recruited agents, emphasizing that briefing sales could proceed without the restrictions imposed by financial authorities. Last month, the revenue achieved through these specific GAs alone amounted to 380 million KRW, accounting for 23% of the total GA sales.

Briefing sales involve explaining insurance products and encouraging sign-ups within a short time to a large group, a method that has gained popularity in the GA industry. However, there have been continuous concerns about potential consumer harm due to incomplete sales practices. Since 2015, the FSS has steadily strengthened regulations related to briefing sales, allowing only a few GAs to conduct such activities under strict internal control and educational protocols.

In response to these claims, NongHyup Life Insurance has firmly denied the allegations. A company representative stated, "The recent strong performance is due to enhanced product competitiveness, and the briefing sales claims are baseless." They added, "Our company has been reducing the proportion of briefing sales for several years, and we are not currently engaged in such activities." The representative further mentioned, "It appears that some GA branches are independently conducting these sales activities, which is clearly a punishable offense under our internal regulations."

The controversy surrounding NongHyup Life Insurance's resumption of briefing sales highlights ongoing issues of fairness and regulatory compliance within the insurance industry. The outcome of the dispute between GA industry stakeholders and NongHyup Life remains to be seen, but it serves as a reminder of the need for stricter regulations and oversight to ensure consumer protection and a fair competitive environment.