1 Trillion Won in Dormant Funds... Financial Supervisory Service to Review Refund Performance of Financial Companies

Dormant Insurance Funds Total 520 Billion Won
Deposits and Savings 290 Billion Won, Trusts 104 Billion Won

New Issuance and Refunds Must Be Reported Semiannually
Financial Supervisory Service Announces Revision of Related Rules

[Asia Economy Reporter Oh Hyung-gil] Financial authorities regularly monitor how much of the 'dormant financial assets' lying idle in deposit accounts, insurance policies, and stock accounts are returned to consumers by financial companies. This is to accurately grasp the actual situation and encourage financial companies to inform customers about the existence of 'sleeping money' and actively promote refunds.

According to financial authorities and the financial industry on the 8th, the Financial Supervisory Service (FSS) announced on the 4th that it plans to revise the "Banking Supervision Work Implementation Rules and Insurance Supervision Work Implementation Rules," which require financial companies to regularly report the status of dormant financial assets and refund performance.

Going forward, financial companies must report the status of dormant deposits, dormant cashier's checks, dormant insurance money, newly generated and refunded amounts, status of inactive deposits, and unpaid insurance money every half year through business reports.

This is because despite efforts by financial authorities and financial companies, the scale of dormant financial assets in Korea, which customers forget and leave idle in financial companies, has not been significantly reduced.

According to the FSS, as of the end of June, dormant financial assets with expired statute of limitations due to long-term inactivity amounted to 1.18 trillion KRW. Dormant insurance money accounted for the largest portion at 520 billion KRW. Dormant savings and deposits totaled 289.9 billion KRW, dormant securities and unclaimed stock dividends were 263.3 billion KRW, and dormant trusts recorded 104.4 billion KRW.

Dormant deposits refer to deposits for which the bank's claim statute of limitations (5 years for banks, 10 years for post offices) has expired. This includes inactive deposits for over one year and unspecified money trusts with maturities exceeding five years.

Dormant insurance money refers to insurance money where the policy has lapsed due to non-payment of premiums or where the claim statute of limitations (3 years) has expired after maturity without being claimed. This mostly includes surrender refunds, maturity or early withdrawal insurance money, survival pensions, accident installments, and policyholder dividends.

Financial authorities and companies have returned part of the dormant financial assets, which reached 4.4 trillion KRW in 2016, to consumers through campaigns to find hidden financial assets. Financial companies guide customers to designate accounts for automatic reinvestment or deposit after account maturity when subscribing to new financial products.

The authorities have also set a policy to analyze the causes of dormant financial assets by financial sector such as banking, insurance, and securities to block them early, but the actual amount refunded remains small.

Financial authorities expect that regular reporting on dormant financial assets will strengthen management and supervision compared to the past, thereby expanding the scope of refunds. An FSS official said, "The purpose is to promote an accurate understanding of dormant financial assets across all sectors," adding, "We plan to systematically manage statistics on dormant assets and refund performance while encouraging financial companies to make refunds."

A financial industry official advised, "It is important for financial product subscribers themselves to carefully identify and reclaim their dormant assets."

Meanwhile, by using the "Find My Sleeping Money" feature on Pine, a financial consumer information portal operated by the FSS, one can check the possession and amount of dormant financial assets at once with just a name, resident registration number, and digital certificate. Additionally, by using the "Hidden Deposit and Insurance Money Inquiry" services of the Korea Federation of Banks or the Life and Non-life Insurance Associations, it is possible to inquire about financial assets before the claim statute of limitations expires.

This content was produced with the assistance of AI translation services.