Sungwook Cho: "Serious Monopoly in Guarantee Insurance... Regulatory Improvement Needed for Private Sector Opening"

"Since Restricting New Licenses After the Foreign Exchange Crisis, Monopoly Maintained Until Now"
Issues Pointed Out Such as High Insurance Premium Levels and Lack of Incentives for Product and Service Improvement

Chairman Jo Seong-wook of the Korea Fair Trade Commission is delivering a welcome speech at the opening ceremony of the Franchise Comprehensive Support Center held on the 29th at the Korea Fair Trade Mediation Agency in Jung-gu, Seoul. Photo by Kang Jin-hyeong aymsdream@

[Sejong=Asia Economy Reporter Kwon Haeyoung] Cho Sung-wook, Chairman of the Fair Trade Commission, announced that he will promote competition through regulatory improvements to prevent monopolization in the guarantee insurance market, which is worth 1,200 trillion won.

At the joint academic conference of the Fair Trade Commission and the Korea Regulation Society held at the Korea Chamber of Commerce and Industry on the 4th, Chairman Cho emphasized, "As a result of restricting new licenses to recover public funds injected into the guarantee insurance market during the last foreign exchange crisis, the monopolistic structure has been maintained until now."

He stated, "High insurance premium levels and lack of incentives to improve products and services have been pointed out as problems," adding, "Please discuss the issue of opening the guarantee insurance market to the private sector in depth at this symposium, and based on the results, the Fair Trade Commission will also work on improvements through alternative measures."

He continued, "Guarantee insurance functions to support transaction opportunities with institutional finance for individuals and small and medium-sized enterprises lacking collateral capacity," and added, "Especially, the Jeonse deposit return guarantee is closely related to the daily lives of ordinary citizens, so I believe this will be a very beneficial discussion."

He also mentioned the need for regulatory improvements related to the private consignment designation system. Chairman Cho emphasized, "If fields monopolized by public institutions are opened to the private sector, prices and service quality will improve through competition," and "There will be significant positive ripple effects such as the creation of new jobs through the expansion of private business opportunities."

This academic conference was held concurrently with the spring academic conference of the Regulation Society and was divided into two parts. In Part 1, under the theme "Challenges and Directions for Improving Competition-Restrictive Regulations," issues and improvement plans regarding the private consignment designation system, which is monopolistically designated mainly by public institutions, were discussed, along with the problem of opening the guarantee insurance market operated as a monopoly. In Part 2, under the theme "Regulatory Reform: Diagnosis and Strategy," strategies for flexibilizing the regulatory system to respond quickly to technological changes were explored, and economic effect analyses of the Most Favored Consumer (MFC) clause by platform operators were discussed.

A Fair Trade Commission official stated, "Based on the results of this academic conference, we will expand private consignment institutions for inspection and certification tasks," and added, "We will also improve the system to promote competition so that the general public can reduce service costs in the guarantee market, such as the Jeonse deposit return guarantee."

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