South Korea Insurance Industry – Governance, Risk and Compliance

South Korea Insurance Industry Report Overview

The South Korea insurance industry is regulated mainly by the Financial Services Commission (FSC) and Financial Supervisory Service (FSS). Other bodies that oversee the industry are IAIS, Korea Life Insurance Association (KLIA), and the General Insurance Association of Korea (GIAK).

The South Korea insurance industry research report provides a detailed analysis of the insurance regulations for life, property, motor, liability, personal accident, health, and marine, aviation, and transit insurance. The report specifies various requirements for the establishment and operation of insurance and reinsurance companies and intermediaries. It also gives insurers access to information on prevailing insurance regulations, and recent and upcoming changes in the regulatory framework, taxation, and legal system in the country. Moreover, it includes the scope of non-admitted insurance in the country.

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South Korea Insurance Industry – Key Regulators and Legislation

Financial Services Commission (FSC): It was established to protect the integration of Korea’s financial markets by promoting a sound credit system and fair business practices. The FSC serves as a consolidated policy-making body for all matters pertaining to the supervision of the financial industry. The FSC’s key responsibilities include the establishment and implementation of insurance legislation and guidelines

International Association of Insurance Supervisors (IAIS): The IAIS represents regulators and supervisors of 190 jurisdictions in more than 140 countries. It formulates and issues various global principles, standards, and guidance provides training and support on issues related to supervision, and organizes meetings and seminars for supervisors. The primary objectives of the IAIS are to promote effective and globally consistent supervision of the industry to develop and maintain a fair, safe, and stable market for the benefit and protection of policyholders, and to contribute to global financial stability.

The key laws and regulations in the South Korea insurance industry are as follows:

• Insurance Business Act
• Enforcement Decree of the Insurance Business Act
• Insurance Business Supervisory Regulations
• Korean Commercial Code 2015

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South Korea Insurance Industry - Compulsory Insurance

Some of the key compulsory insurance required within the South Korea insurance industry are:

• Motor Third-Party Liability Insurance
• Marine Liability Insurance
• Professional Indemnity Insurance
• Social Security Insurance

South Korea Insurance Industry Analysis by Compulsory Insurances

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South Korea Insurance Industry - Company Registration and Operation

A license is required to operate in the South Korea insurance industry. The FSC supervises and regulates the establishment of an insurance company under the guidelines outlined in the Insurance Business Act and the Enforcement Decree of the Insurance Business Act.

Insurance agents must have at least one qualified employee who meets the requirements for individual agents to get the license. In addition, they must have at least 100 officers and employees with 10% of total employees and officers meeting the requirements of insurance solicitors.

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South Korea Insurance Industry - Taxation

The different types of taxes in the South Korea insurance industry are tax on insurance premiums, corporate income tax, corporate capital gains tax, and value-added tax.

Corporate Income Tax: The Taxation Act comprises the rules and regulations on taxation in the country. Corporate income tax is imposed on a company’s taxable income. Resident companies are taxed on their worldwide income while non-resident companies are only taxed on their Korean sourced income.

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Scope

• The report covers details of the insurance regulatory framework in South Korea.
• The report contains details of the rules and regulations governing insurance products and insurance entities.
• The report lists and analyzes key trends and developments in the country’s insurance regulatory framework.
• The report analyzes the rules and regulations about the establishment and operation of insurance businesses in the country.
• The report provides details of taxation imposed on insurance products and insurance companies.

Key Highlights

• The Financial Supervisory Commission and the Financial Supervisory Service regulate the South Korean insurance industry.
• Composite insurance is not permitted in South Korea. However, both life and non-life insurers can carry on accident and health insurance business.
• Motor third-party liability insurance, fire, and liability insurance for buildings are the key mandatory classes of insurance in South Korea.
• Non-admitted insurance is permitted for life and reinsurance business in South Korea.

Reasons to Buy

• Provides FAQ-style analytical insights comprising 129 knowledge elements on insurance compliance applicable to the country.
• Gain insights into the insurance regulatory framework in South Korea.
• Track the latest regulatory changes and expected changes impacting the South Korea insurance industry.
• Gain detailed information about the key regulations governing the establishment and operation of insurance entities in the country.
• Understand key regulations and market practices pertaining to various types of insurance products.