FSS summons insurance companies, urges "Strengthen internal controls on insurance product development and sales"

The financial authorities convened domestic insurance companies to urge restraint in excessive coverage design and to strengthen internal controls.

On the 12th, the Financial Supervisory Service (FSS) held an internal control workshop for insurance companies at its headquarters in Yeouido, Seoul, targeting audit department heads and practitioners from 22 life insurance companies and 19 non-life insurance companies.

At the workshop, the FSS pointed out the harmful effects of excessive performance competition among insurance companies. Recently, in the insurance industry, following the implementation of the International Financial Reporting Standard 17 (IFRS17), there are concerns about consumer damage and deterioration of soundness due to short-term performance-oriented insurance product sales and intensified competition.

원본보기 아이콘

The FSS explained the major tasks promoted by the Insurance Reform Committee and the recently enacted financial accident prevention guidelines at the workshop. It encouraged insurance companies to ensure that the newly established tasks and guidelines are implemented without delay.

Based on the results of the internal audit consultation system inspection, the FSS highlighted the importance of internal controls by explaining vulnerable areas and necessary improvements within insurance companies.

The FSS plans to respond strictly to prevent the spread of consumer damage related to unreasonable products that pose a high risk of soundness impairment or incomplete sales.

An FSS official stated, “We will continue to communicate closely with the insurance industry through various channels such as internal control workshops and meetings,” adding, “We will actively support the strengthening of internal control functions to establish a sound insurance order and protect consumers.”

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.