Financial Services Commission to Promote Capital Expansion for Insurers and Legalization of Joint Reinsurance

Establishment of the Financial Services Commission IFRS17 Regulatory Amendment Task Force (Source: Financial Services Commission)

[Asia Economy Reporter Oh Hyung-gil] The government will legislate support measures to activate liability adjustment tools such as capital expansion for insurance companies and co-reinsurance.

On the 30th, Do Gyu-sang, Vice Chairman of the Financial Services Commission, stated at the Insurance Capital Soundness Advancement Promotion Task Force meeting held via non-face-to-face video conference, "We will prepare without fail to revise the current insurance business regulations in line with the implementation of the new insurance accounting standards (IFRS 17) in 2023."

The Financial Services Commission has established the 'IFRS17 Regulatory Revision Promotion Task Force' under the promotion task force and operates four working groups covering accounting systems, actuarial systems, soundness systems, and product systems. Participants in the working groups include officials from the Financial Services Commission, Financial Supervisory Service, Insurance Development Institute, Life and Non-life Insurance Associations, and insurance companies.

The working groups plan to review reforms such as the revision of insurance supervisory accounting and solvency systems to align with the new accounting standards, improvement of the Risk-based Assessment of Actuarial Soundness (RAAS), enhancement of management disclosure systems, grounds for issuing contingent capital securities, and strengthening of the reserve verification system.

Additionally, discussions will be verified through the operation of an expert advisory group.

Based on the review by the promotion task force, the Financial Services Commission aims to prepare a 'Insurance Business Act Amendment Bill' and submit it to the National Assembly in the first half of next year. After the amendment bill is prepared, revisions to enforcement ordinances and supervisory regulations will also be reviewed sequentially.

Accordingly, the Financial Services Commission plans to hold the 7th meeting of the Insurance Capital Soundness Advancement Promotion Task Force in the first quarter of next year to thoroughly check the implementation of IFRS 17, impact analysis according to K-ICS 3.0, capital expansion by the insurance industry, and preparation status of new accounting and settlement systems.

Vice Chairman Do said, "Through the promotion task force, we plan to reflect changes in accounting standards in insurance business regulations and prepare legislative measures to activate various support tools such as capital expansion for insurance companies and co-reinsurance. We also urge the insurance industry to establish proactive capital expansion plans and thoroughly review overall management strategies to ensure a smooth transition to the new accounting standards."

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