Insurance Industry Requests Transition Team to Allow Comprehensive Payment Services with Settlement Account Capability

President-elect Yoon Suk-yeol is leaving the office of the 20th Presidential Transition Committee in Tongui-dong, Seoul, on the 6th. Photo by Transition Committee Press Corps

[Asia Economy Reporter Song Seung-seop] The insurance industry has requested the Presidential Transition Committee to allow comprehensive payment services that enable the issuance of payment accounts for deposits and withdrawals, simple payments, and remittances.

According to the industry on the 13th, the Life Insurance Association and the General Insurance Association recently submitted "New Government Proposal Materials" to the transition committee.

The associations argued that the Electronic Financial Transactions Act should be amended to allow comprehensive payment services. Comprehensive payment services is a system that allows fintech companies to directly issue payment accounts, which are currently only permitted to banks. Companies that acquire comprehensive payment service licenses cannot offer deposits and loans but can provide integrated digital payment services such as deposits and withdrawals, simple payments, remittances, salary transfers, card payments, and insurance premium payments through their own financial platforms. Currently, a bill to allow fintech and card companies to provide comprehensive payment services has been submitted to the National Assembly, but there has been no discussion about allowing insurance companies.

The associations also requested revisions to the financial sector MyData technical guidelines to enable the integration of personal credit information management services (MyData) into face-to-face services. They argued that allowing insurance companies to use medical MyData would help promote public health and activate related startups.

Additionally, they demanded the introduction of an insurance agency regulatory system for big tech companies to ensure regulatory fairness. This is based on the principle of "same activity, same regulation," meaning that big tech companies selling insurance online should also be regulated. To this end, they proposed the introduction of a "big tech insurance agency" system, limits on commission rates, and restrictions on the proportion of business handled with specific insurance companies.

The proposal also included strengthening the sales responsibility of large corporate insurance agencies (GA). The insurance industry believes that corporate insurance agencies have focused on sales commissions, leading to serious moral hazard and incomplete sales. They emphasized the need to amend the Financial Consumer Protection Act to hold GAs accountable for sales compensation.

Other contents included ▲suppressing excessive non-reimbursable and oriental medicine treatments ▲strengthening social safety nets such as relief for electric vehicle safety accident victims and construction worker accident insurance ▲computerization of claims for indemnity health insurance ▲mandatory prior explanation and patient signature for non-reimbursable treatments ▲utilization of public medical information for customized product development ▲activation of elderly care service market entry ▲mandatory accident insurance for construction site workers and construction project insurance ▲relaxation of restrictions on the business types of investment subsidiaries ▲and easing restrictions on bond issuance purposes.

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