Financial Services Commission Chair Lee Eo-gwon met with insurance company chief executive officers (CEOs) for the first time since taking office and urged active participation in productive finance.
Lee held a roundtable on the 16th with the Life Insurance Association, the General Insurance Association of Korea (GIAK), and representatives from 20 insurers. At the meeting, they discussed operating plans for a "three-piece set" of measures to help overcome low birthrates, the rationalization of discount rates, and ways to introduce duration regulations.
As part of joining productive finance, the insurance industry proposed, following the securitization of death benefits and co-prosperity products with local governments, a third set of measures including discounts on children's insurance premiums, premium payment deferrals, and deferrals of repayments on policy loans. Insurers will decide on their own the discount rates for children's insurance premiums, totaling 9.4 trillion won, and premium payment deferrals will apply to the policyholder's or spouse's protection-type personal insurance. For policy loan repayment deferrals, the grace period can be selected for up to one year.
The Financial Services Commission plans to make actuarial assumptions such as loss ratios more specific to improve comparability of risk-based capital ratios. It will prepare a plan within the year to regulate the basic capital ratio and will also review rationalizing the accumulation of surrender value reserves. Expanding the ultimate observation maturity will be pursued not by 2030 but by 2035.
In addition, policy support will proceed for asset-liability management and improving asset management revenue rates, along with rationalizing regulations on equity acquisitions, loans, and fund investments. The scope of subsidiaries' incidental business will also be expanded so that insurers can return long-term investment returns to consumers through premium discounts or customized services.
Lee asked insurance company heads to strengthen internal controls and foster an organizational culture so that consumer protection is implemented throughout the entire life cycle of insurance products. Lee said, "Do not be fixated on the CEO's term or short-term performance; look wider and longer and work hard for a great transition of the insurance industry."