In the past, a planner who engaged in 'insurance briefing sales' received a certified letter from a customer regarding a complaint about whole life insurance. However, this planner had never worked at the corporate insurance agency (GA) that sent the certified letter. The person who filed the complaint was also not their client. Why did the GA send a certified letter to an unrelated planner?
This is a tactic used by briefing GAs that specialize in briefing sales to evade complaints. They send certified letters to unrelated planners and shift responsibility to the clients by claiming, 'We have done everything we can.' A person who operated a briefing GA noted, 'They want to use the excuse that the planner did not respond to the certified letter, so there was nothing they could do,' adding, 'If they can't handle complaints, they can shut down the company and start a new GA to continue operations.'
The practice of shutting down after complaints arise from briefing sales and then re-entering the market has reached a serious level. Illegal sales using the so-called 'B code' (a code assigned to planners operating as personal businesses) and tax evasion are occurring. However, while financial authorities are neglecting oversight, they strictly acknowledge the incomplete sales in briefing sales, leading to criticism that only consumers suffer.
Briefing sales refer to instances where planners encourage clients to sign up for insurance during mandatory training hours or at conferences and seminars. Recently, it has evolved into events that even recruit celebrities to attract participants and engage in sales.
According to coverage by Chosun Biz on the 11th, a GA that was caught conducting improper insurance solicitation by the Financial Supervisory Service in 2014 has recently established a new GA to conduct briefing sales. They employ a strategy of selling short-term payment whole life insurance as a 'savings account that offers compound interest for life,' shutting down in response to complaints, and then starting a new company again. It is reported that some briefing GAs set sales targets and close down immediately upon achieving them.
When a briefing GA shuts down, clients become 'lost customers' as their planners disappear, leaving them with no one to manage their contracts. They are forced to file complaints with financial authorities, but it is rare for such complaints to be accepted. It is nearly impossible to secure evidence to prove incomplete sales. One planner, who was repeatedly called to the Financial Supervisory Service due to complaints, said, 'Because I obtained their original signature directly, I won (the complaint) even when I went to the Financial Supervisory Service,' adding, 'It seems incomplete sales are only recognized when evidence like photos from the briefing sales site is confirmed.' They further noted, 'Recently, with mobile applications for subscriptions, the chances for clients to win are virtually nonexistent.'
Briefing GAs are also deploying individuals who lack qualifications as insurance planners. Job postings on social media indicate that '(sales) are possible without a planner code (qualification).' They recruit customers using unqualified ghost planners or planners who have been suspended from work, proceeding with contracts under the names of planners with B codes. Commissions are split between the ghost planner and the B code planner.
The B code also signifies 'tax evasion strategies.' Contracts are made in the name of B code planners who did not participate in recruiting clients, falsely reporting that the commission was paid to the B code planner. In reality, the briefing GA keeps the commission, which is not accounted as revenue, allowing them to pay less in taxes. The B code planner, who merely lends their name, has no responsibility for the contracts, and even if complaints are filed with financial authorities, they are not recognized as complete sales, creating a vicious cycle.
Most planners who have worked at briefing GAs are also suffering. They not only pass on the complaints to the planners but also provide only partial commissions while failing to pay other incentives. Due to the employment of unqualified individuals or those with insufficient experience, such facts often come to light too late. In 2022, there was a case where the Korea Insurance Consumer Federation and planners won a lawsuit for commission refunds against a briefing GA.
A source who has been involved in the GA industry stated, 'The briefing sales system can be continuously utilized once it is established,' and added, 'It is a structural problem when someone who has engaged in briefing sales can reestablish a briefing GA, earn a significant amount, shut down, and then someone who learned from them repeats the process.'