"Insurance Broadcasting Also Subject to Review"... Insurance Advertising Becomes More Complex Due to the Financial Consumer Protection Act (Comprehensive)

The Korea Non-Life Insurance Association Begins Revising 'Advertising Regulations'
Mandatory Information Significantly Increased
Advertising Prohibitions Become Stricter

[Asia Economy Reporter Oh Hyung-gil] With the enforcement of the Financial Consumer Protection Act, insurance advertisements are expected to become more complex. Most insurance ads flooding TV, the internet, and YouTube must undergo review, as business and loan advertisements are also included in the review scope, and mandatory disclosure items will significantly increase.

According to the insurance industry on the 6th, the General Insurance Association recently announced a revision proposal regarding advertising regulations and initiated a public consultation process. The revision includes newly defined business and loan advertisements and reflects mandatory disclosure items and prohibited acts for product advertisements, loan advertisements, and business advertisements under the Financial Consumer Protection Act.

The mandatory disclosure items in insurance advertisements under the Financial Consumer Protection Act have also greatly increased. In particular, product advertisements now have as many as 20 mandatory items. Business advertisements and loan advertisements have 11 and 10 newly established items, respectively.

Accordingly, product advertisements must now include an item encouraging consumers to read the product description and terms and conditions before concluding a contract related to financial products. It is also mandatory to inform consumers that if they cancel an existing contract and enter into another, the contract conclusion may be refused, or the consumer’s payment costs such as premiums may increase, or coverage details may change.

Additionally, the mandatory disclosures include ▲ reasons for insurance payment and insurance amounts for basic contracts and special contracts ▲ number of payments and payment limits, deductibles, etc., for hospitalization expenses, diagnosis fees, actual medical expenses, etc. ▲ reduced insurance payments within a certain period ▲ coverage start dates for specific coverages such as cancer and dementia ▲ proportional sharing in case of overlapping subscriptions for insurance contracts that compensate actual damages ▲ reasons for insurance payment restrictions, including disease classifications specified in the terms and conditions such as high-cost cancer and 16 major diseases.

When solicitors act as agents or brokers for product sales, they must disclose ▲ the name and business details of the insurance company they represent or broker ▲ whether they represent or broker for only one insurance company ▲ and, if the solicitor has not been granted the authority to conclude financial product contracts by the insurance company, the fact that they do not have the authority to conclude financial product contracts.

Prohibited advertising practices have become more stringent. It is forbidden to display premiums on a daily basis or to provide insufficient explanations of premium calculation criteria that may mislead consumers into thinking premiums are low. Comparing with other financial products or comparing other insurance companies’ products or business conditions without objective grounds is prohibited.

The role and authority of the Advertising Review Committee under the association have also been significantly strengthened. The committee can now request correction or suspension of posting and distribution of advertisements that mislead consumers’ subscription decisions or violate regulations.

Insurance companies are currently required to remake some advertisements to comply with the advertising regulations reflecting the Financial Consumer Protection Act and undergo review again. Since existing advertisements cannot be used after the guidance period for the Act ends in September, advertisements reviewed in February may also need to be reviewed again.

An industry insider said, "Currently, it is difficult to easily modify publicly released video advertisements or outdoor advertisements," adding, "Requiring the provision of product descriptions due to complex insurance terms and conditions and mandating detailed explanations in advertisements is an excessive regulation."

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