"Handled by Insurance Complaints Association"... Proposal for Amendment to Insurance Business Act Introduced

Representative Kim Han-jung's Proposed Legislation

Kim Han-jung, Chair of the National Crisis Overcoming Committee, is delivering opening remarks at the Childcare Task Force Party-Government Meeting of the National Crisis Overcoming K-New Deal Committee held at the National Assembly on the 23rd. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Oh Hyung-gil] Legal grounds will be established to allow the Insurance Association to handle consumer complaints related to insurance.

On the 12th, Kim Han-jung, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, introduced a revision bill to the 'Insurance Business Act' that provides the Insurance Association with the authority to perform complaint handling, autonomous dispute mediation, and counseling services.

Insurance involves complex product structures and sales stages, leading to a continuous increase in consumer complaints. In 2019, insurance-related complaints accounted for 62% of all financial complaints.

In particular, insurance complaints arise from various situations such as differences in interpretation or understanding of terms and conditions between sellers and consumers, telemarketing (outbound) sales through solicitors, and a significant portion also consists of simple complaints like violations of disclosure and notification obligations or questions and suggestions.

Currently, all complaints are concentrated at the Financial Supervisory Service (FSS), but the manpower of the financial supervisory authority responsible for this is limited, causing the processing time for complaints and disputes to increase every year. According to the FSS, the average processing time for financial complaints in 2019 was 24.8 days, an increase of 6.6 days compared to 2018.

Accordingly, the revision bill establishes legal grounds for the Insurance Association to handle insurance complaints, autonomously mediate insurance disputes, and perform other counseling services, and requires the Insurance Association to establish regulations and procedures for complaint handling and dispute mediation.

Currently, the Korea Financial Investment Association under the 'Financial Investment Services and Capital Markets Act' and the Specialized Credit Finance Association under the 'Specialized Credit Finance Business Act' also perform autonomous dispute mediation and counseling and handling of user complaints related to their members' business activities.

Rep. Kim said, "We have laid the foundation to handle insurance-related complaints and disputes, which constitute the majority of financial complaints, more promptly," adding, "If the relevant authorities thoroughly review the scope of complaints that the Insurance Association can handle and the complaint handling procedures, consumer dissatisfaction and inconvenience can be reduced."

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