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Recently, the Financial Supervisory Service (FSS) imposed a 100 million won fine on the General Agency (GA) 'Won Financial Services' for engaging in fraudulent insurance contracts known as 'written contracts.'  Recently, the Financial Supervisory Service (FSS) imposed a 100 million won fine on the General Agency (GA) 'Won Financial Services' for engaging in fraudulent insurance contracts known as 'written contracts.' This action aims to address illegal practices and establish a sound insurance sales order. Let's delve into the definition of written contracts, the issues they pose, and the FSS's response to these fraudulent activities. The recent issue in the financial sector involves the GA 'Won Financial Services,' which has been penalized for engaging in 'written contracts,' a type of fraudulent insurance contract. The Financial Supervisory Service has fined the company 100 million won and issued a warning to the company's e...

In the first half of this year, the mis-selling rates in the General Agency (GA) sector continued to show improvement, maintaining stable levels in both life and non-life insurance at 0%. In the first half of this year, the mis-selling rates in the General Agency (GA) sector continued to show improvement, maintaining stable levels in both life and non-life insurance at 0%. This trend suggests that self-regulatory efforts to restore trust in the insurance industry are yielding positive results. In this post, we will explore the reasons behind the improvement in business soundness within the GA sector and examine the efforts being made to regain industry trust. In the first half of 2023, the mis-selling rates within the General Agency (GA) sector continued to improve, maintaining a stable level at 0% for both life and non-life insurance. The reduced mis-selling rates among large GA companies indicate that the industry's various self-regulatory efforts to restore trust are proving eff...

The introduction of the Insurance Sales Specialist Company system is imminent, with strengthening the responsibilities of General Agencies (GAs) becoming a key issue.  The introduction of the Insurance Sales Specialist Company system is imminent, with strengthening the responsibilities of General Agencies (GAs) becoming a key issue. Due to the intense competition among GAs for scouting insurance agents and the resulting consumer harm, the Financial Services Commission is reviewing plans to assign GAs responsibilities at the level of financial institutions. In this blog, we will take a closer look at the background of introducing the Insurance Sales Specialist Company system, the current status of GAs, and the future outlook. 1. Background and Necessity of Introducing the Insurance Sales Specialist Company The influence of GAs in the insurance industry has been steadily increasing. Due to their ability to sell products from multiple insurance companies simultaneously, many insurance...

The introduction of the new insurance accounting standard, IFRS17, The introduction of the new insurance accounting standard, IFRS17, in the first quarter of 2024 has brought significant changes to the insurance industry. One of the most notable changes is the increased importance of Contractual Service Margin (CSM), which has led to a surge in the influence of General Agencies (GA) that excel in securing high volumes of CSM. As a result, insurance companies have been actively entering the GA market through subsidiaries and equity investments, leading to an overheating market. This blog post explores the background of the GA market overheating following the implementation of IFRS17, the resulting issues, and potential solutions. IFRS17 requires insurance companies to recognize the expected future unrealized profits from insurance contracts as a present value liability, which is gradually amortized and recognized as operating profit over several years. This has made CSM a critical growt...