Financial authorities will push for a comprehensive insurance reform plan that includes five major strategies and 74 tasks. Among the 74 tasks, 23 are currently in progress, and the rest will be carried out through an insurance reform inspection team operated primarily by associations and insurance companies. Financial authorities plan to implement necessary legislative measures for institutional improvements by the end of this year. The four undecided tasks will be pursued through short-term research projects and consultations with relevant agencies.
On the 18th, financial authorities announced a comprehensive insurance reform plan based on the agenda discussed at the insurance reform meeting held over the past year. The five major strategies of the comprehensive plan include consumer-oriented institutional reform, improvement of insurance products, enhancement of sales channel reliability, renewal of corporate culture in insurance companies, and future responsiveness.
Consumer-oriented institutional reform focuses on restructuring product description materials and disclosure systems. At the contract signing stage, the provision of information about products and insurance planners will be expanded to prevent incomplete sales. The controversial medical advice system and the loss assessment system have also been improved.
In the area of insurance product improvement, initiatives will include the liquidity of death benefits, where benefits can be received during one’s lifetime instead of after death, preferential interest rates for insurance contract loans for the elderly, and the expansion of coverage and enrollment age in real insurance for the elderly and those with pre-existing conditions. Additionally, an approximately 3% reduction in premiums is expected from automobile insurance reforms.
In sales channels, the '1200% rule' will apply not only to exclusive agency planners of insurance companies but also to planners affiliated with general insurance agencies (GA). The 1200% rule refers to setting the commission paid to planners in the first year after contract signing to within 1200% of the monthly premium. A new insurance company GA operational risk assessment system, which assigns management responsibility to insurance companies, will also be established.
Financial authorities stated they will enhance the controversial new accounting system (IFRS 17). Additionally, a tone-tinged and low-surrender value pension insurance product that is expected to yield approximately a 40% increase in pension amounts will be introduced, and innovative services utilizing insurtech such as artificial intelligence (AI) and big data will also be supported.