"FSS Should Carefully Consider Introducing 'One-Sided Binding Effect'"

DLF Disciplinary Hearing Attendees Awaited by Reporters
(Seoul=Yonhap News) Reporter Kim Do-hoon = On the 30th, the third disciplinary committee meeting related to the overseas interest rate-linked derivative-linked fund (DLF) incident was held at the Financial Supervisory Service in Yeouido, Seoul, where reporters were waiting for the attendees of the disciplinary hearing.
At this disciplinary hearing, the level of disciplinary action for Woori Bank and Hana Bank, which sold the DLF, as well as Sohn Tae-seung, Chairman of Woori Financial Group and CEO of Woori Bank, and Ham Young-joo, Vice Chairman of Hana Financial Group (then CEO of Hana Bank during the DLF sales), is expected to be decided. 2020.1.30
superdoo82@yna.co.kr
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[Asia Economy Reporter Oh Hyung-gil] There has been a call for careful consideration regarding the introduction of one-sided binding force that allows only consumers to appeal decisions made by the Financial Dispute Mediation Committee.

Hwang Hyun-ah, a research fellow at the Korea Insurance Research Institute, stated in the report "Diagnosis and Tasks of the Insurance Industry (Ⅳ) - Insurance Disputes and Legislation" on the 23rd, "Applications for dispute mediation at the Financial Supervisory Service have been steadily increasing over the past three years, and the option to grant one-sided binding force to small-amount dispute mediation decisions is also under discussion."

One-sided binding force means that only consumers can contest the dispute mediation decision by filing a lawsuit, while financial institutions cannot challenge it.

Research fellow Hwang pointed out, "The largest portion of insurance disputes, ‘disputes related to insurance claim and payment,’ are resolved through civil lawsuits and dispute mediation by the Financial Supervisory Service," adding, "In particular, the introduction of one-sided binding force requires careful review because it may block opportunities for legal development and precedent formation in cases with small dispute amounts but significant legal importance, such as issues related to self-payments in auto insurance."

She also argued, "Regarding administrative sanctions imposed by supervisory authorities on insurance companies, the grounds and levels of sanctions become subjects of legal disputes," and emphasized, "In the case of sanctions for violations of basic document compliance among types of administrative sanctions, it is necessary to review the clarity of the legal basis for the sanctions and the rationality of the criteria for calculating fines."

Furthermore, concerning insurance fraud, she stated, "A system that can comprehensively oversee administrative sanctions related to insurance fraud, criminal penalties, and civil lawsuits for insurance claim recovery is necessary," and added, "It is essential first to clarify whether the Special Act on the Prevention of Insurance Fraud will serve as the comprehensive legal basis for insurance fraud-related disputes, and then proceed with discussions on legal amendments that align with the system."

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