Jung Eun-bo Meets Life Insurance Companies: "Japanese Insurers' Chain Bankruptcies... Must Serve as a Cautionary Example"

Financial Supervisory Service Holds Meeting with Life Insurance CEOs

Jung Eun-bo, Governor of the Financial Supervisory Service, is delivering a greeting at the Financial Holding Companies Chairmen's Meeting held at the Bankers' Hall in Jung-gu, Seoul on November 3, 2021.

[Asia Economy Reporter Kim Jin-ho] On the 25th, Jeong Eun-bo, Governor of the Financial Supervisory Service, met with the life insurance industry and urged risk management, saying, "We must take the consecutive bankruptcies of seven Japanese life insurance companies as a lesson."

Governor Jeong made these remarks at the 'Life Insurance CEO Meeting' held at the Millennium Hilton Hotel in Seoul. The meeting was attended by Jeong Hee-soo, Chairman of the Life Insurance Association, and CEOs of eight life insurance companies.

Governor Jeong first stated, "The domestic insurance industry has grown to rank seventh worldwide in terms of premium income, but it faces a challenging business environment due to asset management difficulties caused by negative interest rate margins and competition issues with big tech companies," adding, "We must learn from the consecutive bankruptcies of Nissan Life and Toho Life following the collapse of Japan's asset bubble."

He continued, "The surviving insurers at that time focused not only on short-term performance but also strengthened Asset-Liability Management (ALM) and other risk management efforts," emphasizing, "Our life insurance sector must also respond to crises through proactive capital expansion and discovering new opportunities."

Regarding supervision and inspection of life insurers, Governor Jeong said, "For insurers with concerns about systemic risk, we will conduct preemptive inspections to prevent potential risks," and added, "For insurers with lower concerns, we will encourage strengthening autonomous internal controls, such as enhancing the internal audit consultation system."

From the consumer protection perspective, he stated, "We will focus on preventing damages in advance throughout the entire process from product development, insurance solicitation, to insurance claim payments." He emphasized, "At the product development stage, we will enhance the role and effectiveness of insurers' own product committees," and "At the insurance solicitation stage, we will identify and improve consumer protection vulnerabilities in advance."

Regarding big tech's entry into the insurance industry, he said, "Under the principle of same function, same regulation, we will establish a timely and balanced regulatory system to prevent consumer harm and unfair competition."

Additionally, he mentioned that efforts will continue to improve systems related to loss adjustment and medical consultation to ensure fair insurance claim payments. He also expressed the intention to broadly allow insurers to own subsidiaries and engage in ancillary businesses to activate asset management and healthcare services.

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