After the Financial Consumer Protection Act... Complaints to Non-Life Insurance Companies Have Only Increased (Comprehensive)

Sharp Increase in Complaints Related to Guaranteed Products
Complaints Decrease for Banks, Life Insurance, and Savings Banks

[Asia Economy Reporters Oh Hyung-gil, Kim Jin-ho, Song Seung-seop] Since the enforcement of the Financial Consumer Protection Act on March 25, complaints against banks have decreased, while complaints related to insurance have increased. Complaints regarding protection-type products, which have recently emerged as key products in the insurance industry, have surged.

According to the financial sector on the 3rd, insurance company complaints in the second quarter totaled 16,429 cases, a 3.7% increase compared to 15,836 cases in the first quarter before the Financial Consumer Protection Act was enforced. Complaints against life insurance companies decreased by 2.2% from the previous quarter to 6,409 cases, but complaints against non-life insurance companies increased by 7.9% to 10,020 cases during the same period.

Among non-life insurers, Samsung Fire & Marine Insurance had the highest number with 2,020 cases, a 5.5% increase from the previous quarter.

During the same period, DB Insurance recorded 1,820 cases, up 20.1%, followed by Hyundai Marine & Fire Insurance with 1,455 cases (-2.3%). Meritz Fire & Marine Insurance had 1,331 cases (16.7%), and KB Insurance had 1,210 cases (3.3%).

Among life insurers, Samsung Life Insurance received the most complaints with 1,151 cases (-1.8%). KDB Life Insurance followed with 1,068 cases (0.9%), Hanwha Life Insurance with 736 cases (-6.4%), and Shinhan Life Insurance with 684 cases (-13.2%).

The insurance product category with the most significant increase in complaints was protection-type products. Complaints related to protection-type products from non-life insurers rose 10.8% to 5,141 cases compared to the previous quarter. During this period, complaints about automobile insurance decreased by 2.0%, from 3,701 to 3,778 cases.

Complaints about protection-type products from life insurers also increased by 5.4% to 1,403 cases compared to the previous quarter, while complaints about whole life insurance in the second quarter were 3,393 cases, only 30 cases (0.8%) more than in the first quarter.

Although insurance companies have strengthened consumer protection systems following the enforcement of the Financial Consumer Protection Act on March 25 and have taken steps to reduce incomplete sales, complaints have not yet decreased as much as expected.

With the enforcement of the Financial Consumer Protection Act, financial companies must comply with six major sales regulations when selling products: ▲Suitability principle ▲Adequacy principle ▲Duty to explain ▲Prohibition of unfair practices ▲Prohibition of improper solicitation ▲Prohibition of false or exaggerated advertising. Violations of these regulations may result in penalties and punitive fines for the sellers.

However, it has been confirmed that there is no clear decline in complaints in the insurance solicitation and sales sector. The industry expects the impact to appear from September, when enforcement actions against violations of the Financial Consumer Protection Act will begin in earnest. The financial authorities have decided not to impose sanctions on violations of newly established or strengthened regulations under the Financial Consumer Protection Act until September this year.

Conversely, complaints in the financial sector excluding insurance have generally decreased. The total number of complaints in the banking sector in the second quarter was 573 cases, a 1.55% decrease from 582 cases in the previous quarter. Complaints at the six major commercial banks (NH Nonghyup, Woori, Hana, Shinhan, IBK Industrial Bank, KB Kookmin Bank) also decreased by 3.4% from 504 cases in the previous quarter to 487 cases.

However, among the six major commercial banks, IBK Industrial Bank was the only one to see a sharp increase in complaints. Due to the impact of private equity fund incidents such as Discovery and Lime Fund, complaints in the second quarter rose 78% from 41 cases in the previous quarter to 73 cases.

Savings banks also saw a decrease in complaints. Complaints in the second quarter at 11 savings banks subject to disclosure by the Korea Federation of Savings Banks totaled 16 cases, down from 19 cases in the first quarter.

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