Lee Chan-jin, governor of the Financial Supervisory Service, on the 26th criticized the insurance industry, saying, "As a result of focusing on external growth, relying on excessive acquisition commissions and 'self-cannibalizing' sales practices, social welfare is declining for some products," adding, "A shift to qualitative growth based on trust and soundness is inevitable."
On this day at the life insurance education and culture center in Gwanghwamun, Seoul, Lee held a meeting with the presidents of the life and General Insurance Association of Korea and the CEOs of 14 insurers and stated accordingly, "Please establish a sound corporate culture that prioritizes consumer protection."
Lee said, "You should link tangible efforts and outcomes for consumer protection—such as establishing and implementing mid- to long-term strategies to reduce disputes—to the performance compensation system for executives and employees," and urged, "From the product design stage, ensure that consumer protection mechanisms can operate effectively by specifying product review-related duties concretely in the duty statements for product committee members."
The Financial Supervisory Service plans to prepare and push improvement measures for consumer protection vulnerabilities at each business stage, including product design and review, systems, sales, and claims payment. When inspecting insurers, it intends to deploy not only the inspection bureau but also staff from the product and dispute bureaus together.
Lee said, "We will continue to identify and promote institutional improvement tasks, such as strengthening accountability for sales channels and strengthening the duty to inform consumers regarding claims payments." Regarding productive and inclusive finance, Lee said, "We plan to actively pursue institutional improvements needed to expand productive finance, such as adjusting risk weights for infrastructure and venture investments."
Insurer CEOs proposed that the authorities push forward without setbacks the overhaul of sales commissions and the second-phase rollout of digitizing claims for indemnity health insurance.