A free mutual-growth insurance program for local small business owners and vulnerable groups will launch at a scale of 2 billion won.
The Financial Services Commission said on the 16th that local governments and the insurance industry signed a business agreement to support local small business owners and vulnerable groups. The insurance industry, together with six local governments — South Gyeongsang, North Gyeongsang, Gwangju, South Jeolla, Jeju, and North Chungcheong — will launch the mutual-growth insurance in the third quarter.
Each local government will be provided mutual-growth insurance totaling 2 billion won, consisting of one life insurance product (1 billion won) and one non-life insurance product (1 billion won). Of the 2 billion won, 1.8 billion won will come from the insurance industry's mutual-growth fund, and the remaining 200 million won will be borne by the local governments. Earlier, the insurance industry created a 30 billion won mutual-growth fund to support mutual-growth insurance for small business owners and vulnerable groups. The Financial Services Commission projected that 1 million small business owners will benefit from the mutual-growth insurance.
Specifically, a free credit life insurance product will be launched that repays loan balances with insurance proceeds in the event of death or illness (including cancer, cerebral hemorrhage, and acute myocardial infarction). Financial companies will apply a 0.3 percentage point preferential loan rate to credit life insurance policyholders and will also cut the Sunshine Loan guarantee fee rate by 0.3 percentage point.
In Jeju, a construction site climate insurance product will compensate day laborers for lost income when work is halted due to heat waves; in North Chungcheong, a cyber care insurance product will compensate small business owners for damages from direct-transaction fraud; and in South Gyeongsang, products such as fire liability insurance for small restaurants will be launched as part of the mutual-growth insurance.
Financial Services Commission Chair Lee Eog-weon, who attended the signing ceremony, said, "The mutual-growth insurance program will be highly meaningful in reducing the protection gap for vulnerable groups," adding, "Insurance demand will be identified through voluntary calls for proposals by local governments, ensuring the insurance products best fit the needs and conditions of local small business owners."
At the signing ceremony, the insurance industry also announced plans to inject inclusive finance totaling 2 trillion won over five years into initiatives including free enrollment in insurance, easing the burden of paying premiums and interest, and promoting social contribution projects.