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Amendment to Regulations on Supervision of Insurance Business

2013.04.29

"Regulations on Supervision of Insurance Business," which were established to implement "Comprehensive Measures to Improve Actual Loss Health Insurance" that was published by the Financial Services Commission August, 2012 was amended on 28th of November, 2012 and took effect from January 1, 2013.  The main contents of the Amended Regulations on Supervision of Insurance Business ("Amended Regulations") are as follows. 
 
 
1. Contents 
 
Exclusive Actual Loss Health Insurance Product Released 
 
Currently, the Actual Loss Health Insurance is sold as part of an integrated product, and is not regulated by the Regulations on Supervision of Insurance Business. The Amended Regulations have made it compulsory to launch the Actual Loss Health Insurance as a separate product, so that consumers demanding Actual Loss Health Insurance product are able to purchase or change the product exclusively (Amended Regulations, Article 4-35-2(1)(8). 
 
Diversification of deductibles 
 
In addition to the Actual Loss Health Insurance product with 10% deductible, which is available for sale in the current insurance market, the Amended Regulations allow for the launch of a product with 20% deductible (Article 7-49(5)(a), Article7-50-2(1)(a)). In order to have a product with another deductible amount, a separate report needs to be submitted. 
 
Shortened cycles for the change of the insurance premium 
 
The Amended Regulations require the insurance premiums to be adjusted every year. Also, if the change in the insurance premium is greater than the industrial average (reference net insurance premium rate) by a certain range, it has to be reported in advance (Article7-51(1)(5)).  This regulation will take effect from 1st of January, 2014 (Addendum Article 1). 
 
Shortened cycles for the change of the details of the coverage (period of insurance) 
 
From the current system where the insurance is valid until the insured reaches a certain age, the regulation has changed so that the period of insurance is 15 years or less with the insured being notified about the conditions of re-registration in advance (Article7-51(5)(c), Article 4-35-2(1)3).

Awards & Commissions Jipyong and Duroo were Honored with “Public Interest Award” at the 6th Korea Legal Awards 2023.12.12

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