Online Debt Consolidation Loans Available from May Next Year... Insurance Companies' One-Company-One-License Regulation Eased

The 4th Financial Regulation Innovation Meeting Held
Deliberation on Debt Refinancing Infrastructure Establishment and Insurance Sector Regulatory Improvement Plans
Discussion on Financial and Industrial Separation and Outsourcing System Improvement Directions

On the morning of the 14th, Kim Joo-hyun, Chairman of the Financial Services Commission, stated at the 4th Financial Regulatory Innovation Meeting held at the Korea Federation of Banks in Jung-gu, Seoul, that they will continuously review and promote improvements in financial company licensing policies and the expansion of the scope of outsourcing to enable the launch of financial services specialized in diverse and professional fields.

[Asia Economy Reporter Song Hwajeong] Starting from May next year, financial consumers will be able to switch to more favorable loans by comparing loan interest rates and limits through an online, one-stop refinancing loan service. Additionally, the one-company-one-license policy for insurance companies will be relaxed to allow specialized insurance subsidiaries in professional fields.

On the 14th, the Financial Services Commission held the 4th Financial Regulatory Innovation Meeting to review plans for building refinancing loan infrastructure, improving regulations in the insurance sector, and discuss directions for improving the separation of banking and commerce and the outsourcing system.

Financial Services Commission Chairman Kim Juhyun stated, "In this meeting, we proactively changed the one-company-one-license policy for the insurance industry, allowing existing insurers to establish specialized insurance subsidiaries in fields such as pet insurance." He added, "We will continue to review and promote improvements in financial company licensing policies and expand the scope of outsourcing to enable the launch of diverse and specialized financial services."

Chairman Kim also emphasized the need to improve the separation of banking and commerce system. He said, "With the recent acceleration of digitalization and big blur phenomena in finance, it is necessary to improve the separation system to enable new and innovative services through the convergence of financial and non-financial sectors." He continued, "Based on a comprehensive review of economic and legal aspects and reflecting the opinions of the Financial Regulatory Innovation Meeting members, we will prepare improvement plans and, after thoroughly listening to various stakeholders, submit specific proposals to the Financial Regulatory Innovation Meeting early next year."

In this meeting, plans for building refinancing loan infrastructure were reviewed. Accordingly, an online, one-stop refinancing loan infrastructure will be promoted to allow financial consumers to compare loan interest rates and limits and switch to more favorable loans. Through the establishment of a refinancing loan transfer system, repayment procedures between financial companies will be computerized, and the scope of loan information provided to consumers and the operators of loan platforms will be expanded. The Financial Services Commission plans to promote the establishment of the loan transfer system with the goal of starting operations in May next year.

Additionally, the meeting reviewed regulatory improvement plans in the insurance sector and decided to relax the one-company-one-license policy to allow the emergence of specialized insurers suited to the digital environment. Accordingly, existing insurers will be able to establish specialized insurance subsidiaries in professional fields such as pet insurance (insurance exclusively for pets) and small-amount/simple compensation insurance. To enhance management autonomy, excessive regulations on product development and asset management will be eased, and rigid sanctions that excessively restrict business operations will be rationalized. The Financial Services Commission will immediately implement measures that can be enacted promptly, such as changes in licensing policies, and will swiftly proceed with legal revisions and guideline preparations.

In the meeting, as a report agenda, directions for improving the separation of banking and commerce and the outsourcing system were discussed. The Financial Services Commission plans to maintain the basic framework of separation of banking and commerce to ensure financial stability, but will rationally improve regulations on ancillary businesses and subsidiary investments so that the financial industry can sustainably develop in response to environmental changes such as digitalization and big blur. In particular, various options will be reviewed on how to reflect the scope of non-financial businesses that financial companies can engage in within the law. Regarding outsourcing, the commission plans to review whether to establish a legal basis for delegating authority to outsourcing regulations, whether to integrate and unify the regulatory system for outsourcing, the method of permitting outsourcing of essential tasks under outsourcing regulations, and whether to establish inspection authority over trustees.

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