"Same-Day Subscription Restrictions in Briefing Sales: Preventing Mis-selling or Neglecting Changes in the Sales Environment?

Recently, the GA (General Agency) industry has implemented its own "Internal Control Standards for Briefing Insurance Sales" to prevent mis-selling, 

Recently, the GA (General Agency) industry has implemented its own "Internal Control Standards for Briefing Insurance Sales" to prevent mis-selling, setting stricter guidelines for insurance agents during sales activities. However, there are concerns that these measures do not sufficiently consider the current sales environment, resulting in an unfair regulatory burden. In this post, we will explore the background of the same-day subscription restrictions in "Briefing Sales," the associated controversies, and why these rules may need reconsideration.

"Briefing Insurance Sales" refers to a method where insurance agents use educational or seminar sessions within companies or organizations to introduce and promote insurance products to groups. Due to the short time frame for product explanations, there is a high potential for mis-selling in such sales. To mitigate this risk, the GA industry has autonomously established and implemented the "Internal Control Standards for Briefing Insurance Sales."

In June, the Financial Supervisory Service and the GA industry enacted the "Internal Control Standards for GA Briefing Sales" to set clear guidelines and procedures for GA employees and insurance agents to follow when conducting briefing sales. These standards require the prior dispatch of an information notice, including the date of the visit, the name of the agent, the affiliated agency, and the purpose of the visit. Only pre-approved materials can be used during the briefing, such as those reviewed by the insurance company, the Life Insurance Association, or the Non-Life Insurance Association.

Additionally, insurance agents must disclose their identity at the briefing site, inform attendees that they have the right to refuse participation, and collect a "Customer Intention Confirmation Form" from each participant, which the GA must systematically store and manage. Consumers should also be informed about their rights to cancel the contract, withdraw from the subscription, and any disclosure obligations through a standard script.

The most controversial part of these regulations is the restriction on same-day subscriptions. According to current standards, insurance contract subscriptions must be conducted on a day other than the day of the briefing, with the agent visiting individually. 

While these rules aim to protect consumers and prevent mis-selling, some argue that they unfairly discriminate against briefing sales. Given the rapid digitization of the sales environment and the increasing prevalence of mobile subscriptions, restricting same-day subscriptions is viewed by some as inefficient and outdated.

Kim Ki-hoon, a lawyer at Deoksu Law Firm, stated, "If insurance agents fulfill their obligations to properly explain the key aspects of insurance products and the terms of the contract, as required by the Financial Consumer Protection Act and the Commercial Act, allowing same-day subscriptions should not pose a problem." Another industry insider commented, "Nowadays, insurance buyers can verify the product name and main coverage through the product description and do not need an unnecessary cooling-off period."

The GA industry's "Internal Control Standards for Briefing Insurance Sales" have a commendable goal of preventing mis-selling, but they may not adequately reflect the current changes in the sales environment. It is essential for the insurance industry to reconsider the restrictions on same-day subscriptions in light of the digitalization of sales methods and customer convenience. It is a crucial time to seek new ways to balance consumer protection with sales efficiency.