The Financial Supervisory Service will begin evaluating the state of financial consumer protection at large corporate insurance general agencies (GAs) starting next year. GAs that receive low grades in the evaluation must submit an improvement plan to the Financial Supervisory Service and carry it out.
On the 7th, according to the financial authorities and others, the Financial Supervisory Service is pushing to revise the Enforcement Detailed Rules for the Regulations on Financial Consumer Protection to include this. The revision expands the financial consumer protection evaluation, which had focused on banks, insurers, and securities firms, to large GAs and asset management companies.
The Financial Supervisory Service plans to examine the level of consumer protection and the complaint and dispute response system across the entire life cycle of financial products at these firms, from product development to sales and after-sales management. It will also review internal control systems for consumer protection, including how employee key performance indicators (KPIs) are designed and how reports are made to management.
The financial consumer protection evaluation is a system in which the Financial Supervisory Service comprehensively assesses the level of consumer protection by sellers of financial products. It assigns five grades—excellent, good, average, insufficient, and vulnerable—based on eight quantitative and non-quantitative items.
Financial companies that receive an "insufficient" grade in the financial consumer protection evaluation must submit an internal improvement plan to the Financial Supervisory Service within two months after being notified of the results. If they do not implement the plan within a year, a grade cap will be applied in the next evaluation. Financial companies that receive a "vulnerable" grade may face management improvement recommendations or become subjects of focused oversight by the Financial Supervisory Service. The Financial Supervisory Service grants top-performing firms an exemption from self-assessment in the following year. The results will be disclosed on the websites of individual financial companies and each association.
GA consumer protection internal controls remain weaker than those at large financial companies. According to the Financial Supervisory Service's year-end release last year on the 2024 internal control review of large GAs, indicators of consumer protection such as the incomplete sales rate and the contract retention rate for the 13th to 61st installments were both at the third of five grades. Activities by compliance officers in charge of internal control received the lowest, fifth grade.