FSS "Focus on Insurance Companies' Risk and Soundness Management... Attention to Social Role"

2023 Financial Supervisory Service Work Report

[Asia Economy Reporter Minwoo Lee] The Financial Supervisory Service (FSS) plans to focus on managing the crisis response capabilities and soundness of insurance companies this year. Amid ongoing uncertainties such as concerns over economic slowdown and the introduction of new accounting standards, the FSS intends to concentrate its supervisory efforts on ensuring stable company operations.

On the 6th, the FSS emphasized this while announcing its 2023 work plan. First, it will pre-select insurance companies with weak capital adequacy through interest rate sensitivity analysis and other methods. The plan is to primarily encourage capital expansion and enable responses to potential risk factors such as increased market volatility.

Even after the implementation of the new accounting standard 'IFRS 17' starting this year, the FSS will establish a new system to ensure reasonable policyholder dividends. Additionally, it will build an approval process for internal models based on the new solvency regime (K-ICS). Alongside this, the FSS will support efforts to find future growth engines such as healthcare services.

The FSS also plans to strengthen supervision to enhance the social role of the insurance industry. It will support the development of various products that protect vulnerable groups, such as livelihood-type substitute driver automobile insurance, and promote granting interest rate options to reduce the burden on insurance policy loan borrowers. The FSS will conduct focused inspections on acts such as indirect payment of recruitment commissions to insurance planners and establish a comparison guidance system to prevent unfair insurance switching.

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