The Financial Supervisory Service ordered insurers to tighten oversight of general agencies (GA) and said it would hold them strictly accountable for personal data leaks and unsound sales practices.
The Financial Supervisory Service (FSS) on the 23rd held the "first-half 2026 internal control workshop for insurance companies" at its training center in Jongno-gu, Seoul, with more than 100 audit department employees from 22 life insurance companies and 17 non-life insurance companies in attendance, and reviewed key internal control issues. Not only working-level staff but also executives attended the event.
The Financial Supervisory Service (FSS) pointed to cases of personal data leaks and illegal or evasive sales at some GAs in recent days and called for stronger risk management for third-party sales outsourcing. Citing instances in which some long-term care facilities, through GA consulting, purchased whole life policies using government-supported facility operating funds, it called for blocking similar conduct.
The Financial Supervisory Service (FSS) made clear that insurers bear ultimate responsibility for consumer harm arising from outsourced sales and stressed compliance with the "third-party risk management guidelines for insurance companies," which took effect in December last year. It also called for checks on how GAs manage personal data and warned of strong sanctions if they are involved in illegal conduct.
Regarding the "1,200% rule," which will also apply to GAs starting in July, it cautioned against headhunting battles for agents and overheated settlement support payments. The Financial Supervisory Service (FSS) said it would step up inspections and sanctions on unsound sales practices such as improper policy replacement, and would hold not only agents but also insurers and GAs accountable for management oversight.
The "1,200% rule" limits, to within 12 times the monthly premium, the total of commissions and settlement support payments paid in the first year of an insurance sale. As the rule's implementation approaches, more agents are seeking to switch companies after receiving settlement support payments, raising concerns about side effects such as improper policy replacement.
The Financial Supervisory Service (FSS) also called for stronger internal controls across the entire process—from product development to sales and after-sales management—to block the sale of products that cause social costs, such as insurance fraud and excessive non-reimbursable treatment. The Financial Supervisory Service (FSS) said, "As the supervisory and inspection framework shifts to a prevention-first approach, consumer protection must be the top principle."