Small-Amount Short-Term Insurance Launch Made Easier for Pets, Bicycles, and More

On the 24th, with clear autumn weather continuing, a citizen is taking a walk with their pet dog at Ichon Hangang Park in Yongsan-gu, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Kim Min-young] It is expected to become easier to launch insurance products closely related to daily life, such as pet dog insurance and bicycle insurance.

On the 25th, according to the Financial Services Commission, the National Assembly's Political Affairs Committee held a plenary session and passed a revision bill to the Insurance Business Act that newly introduces small-amount short-term specialized insurance business.

The revision bill introduces an insurance business specializing in selling small-scale, short-term insurance with low risk and sets the minimum capital requirement as "an amount determined by Presidential Decree within the range of 1 billion KRW or more."

This is to improve the problem that it is difficult for new businesses to enter the market due to the current law requiring a large amount of capital (20 billion KRW each for life insurance and automobile insurance, 10 billion KRW for disease insurance) to operate insurance business.

The Financial Services Commission stated, "It is expected that innovative insurance products that can meet consumers' demands for various risk coverage in daily life will be activated."

In Japan, which has introduced small-amount short-term specialized insurance business, various products such as pet dog, golf, leisure, bicycle, traveler, weather, ticket, and lawyer insurance are active.

The revision bill also includes provisions to strengthen the protection of insurance consumers' rights. It added "concerns about infringement of consumer rights" as grounds for sanctions against insurance companies, thereby strengthening the obligation of responsible management by insurance companies.

It also included grounds for imposing fines when insurance companies fail to check for duplicate contracts while soliciting indemnity insurance.

When insurance contracts are transferred to another insurance company due to mergers, etc., individual notification to the policyholder is mandatory to ensure they can fully exercise rights such as objections.

The revision bill also includes simplification of procedures for reporting concurrent and ancillary businesses of insurance companies, approval procedures for ownership of subsidiaries, and mandatory external verification of the adequacy of reserve liabilities.

This revision bill is scheduled to be promulgated after discussion by the National Assembly's Legislation and Judiciary Committee and approval by the plenary session. It will be enforced six months after promulgation.

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