The Korea Life Insurance Association and the General Insurance Association of Korea will create new units and add staff within the year to strengthen responses to consumer complaints. The move follows a legal revision allowing each insurance association to handle non-dispute complaints that are filed with the financial authorities. As the financial authorities continue to stress consumer protection, the two associations are seen as taking steps to substantially strengthen their complaint response systems.
According to the insurance industry on the 7th, the Korea Life Insurance Association is reviewing a plan to establish a dedicated consumer complaint unit through a year-end personnel reshuffle. This is the first time the association has considered setting up a dedicated complaint unit. If created, the unit is expected to begin full operations in January next year. An association official said, "We are communicating with the authorities and discussing the types of complaints the association will handle directly," and noted, "We are also reviewing the build-out of infrastructure such as IT systems."
The General Insurance Association of Korea will add to the staff of the Complaint Service Department, which was newly established in July, from the current four to additional hires next year. The department was created by separating and elevating the complaint support team that had been under the existing Consumer Protection Department. An association official explained, "Of the cases filed with the financial authorities, the association will swiftly handle simple complaints to improve consumer convenience."
Last month, a revision to the Enforcement Decree of the Insurance Business Act aimed at improving insurance consumer convenience and rationalizing the system passed the Cabinet meeting. As a result, starting in January next year, complaint intake windows will be consolidated at the Financial Supervisory Service, but the Korea Life Insurance Association and the General Insurance Association of Korea will directly handle non-dispute issues such as simple inquiries or changes in premium payment methods. The two associations are expected to strengthen their complaint response functions in time for the enforcement decree to take effect.
The enforcement decree revision was prepared as the financial authorities recently put "consumer protection" forward as a core policy direction. In September, Financial Supervisory Service Governor Lee Chan-jin emphasized at a meeting with insurance company CEOs that "the essence of insurance lies in consumer protection," and asked for the maintenance of financial soundness, the establishment of fair market order, and the fulfillment of social responsibility. He also warned of stern sanctions in cases of insufficient internal controls and urged the industry to make voluntary improvements.
According to the Financial Supervisory Service (FSS), of the 116,338 total financial complaints last year, 40,365 (34.7%) were general insurance complaints and 13,085 (11.2%) were life insurance complaints, for a total of 53,450. Insurance complaints accounted for 45% of all complaints, the most among financial sectors.
An insurance industry official explained, "It appears intended to improve the efficiency of complaint handling procedures by having the association directly process simple complaints for which the response is set by manual."