"Era of Insurance Underwriting-Sales Separation... Need for Seller Responsibility and Sales Company Business Regulation"

[Asia Economy Reporter Oh Hyung-gil] As the 'separation of manufacturing and sales (Je-pan Bun-ri)' in insurance becomes more active, there are suggestions that financial authorities should proactively review related policies.

Kim Dong-gyeom, a research fellow at the Korea Insurance Research Institute, stated in the report titled "Background of the Insurance Industry's Je-pan Bun-ri Discussion and Future Tasks" on the 7th, "Based on the core competencies of individual insurance companies, evaluation of sales organization performance, and the advantages and disadvantages of different sales organization operation types, choices will be made regarding the establishment of seller companies, spin-off of recruitment organizations, and complete separation of recruitment functions." He diagnosed, "As competition intensifies, work functions are likely to be differentiated to focus on the company's core competencies, and if big tech's entry into the financial industry progresses actively, the sales competitiveness of exclusive organizations may weaken."

He particularly emphasized that to maximize insurance company management performance through Je-pan Bun-ri, it is important to prepare sales organization operation strategies based on additional cost analysis, strengthen product and service competitiveness, and secure seller expertise.

He continued, "When promoting Je-pan Bun-ri, it is necessary to first evaluate internal control establishment and regulatory costs related to consumer protection. If the separation of manufacturing and sales functions accelerates, competition in products and services will become fierce, so strategies to prepare for this are needed." He pointed out, "It is necessary to strengthen seller education or grant separate qualification requirements so that product characteristics can be clearly conveyed to consumers."

He also raised the need for preparatory measures at the supervisory authority level. As the spread of Je-pan Bun-ri is expected to intensify competition in the corporate agency (GA) market, it is necessary to secure compensation liability capabilities for incomplete sales and establish effective sanctions.

Furthermore, since there is a possibility of conflicts of interest between insurance product manufacturers and sellers, it is necessary to clarify responsibility issues for incomplete sales to protect consumers.

He also stressed the need to regulate so that unsuitable product recommendations do not occur during the product comparison explanation process to consumers. Research fellow Kim said, "Supervisory authorities need to conduct policy reviews on seller responsibility issues and sales conduct regulations for product sales companies in preparation for the spread of Je-pan Bun-ri."

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