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Biz News Korea(Eng)

FSC greatly eases investment regulations for Korean insurers

Collected: 2016.06.29

Distributed: 2016.06.30

Source: Go Direct

South Korean insurers will no longer be restricted in overseas real estate investment and foreign currency holdings under a new deregulation action designed to help insurers to improve their profit beyond their traditional revenue of insurance premiums.

Under the revised act announced by the Financial Services Commission (FSC) on Monday, the cap on an insurer’s holding in stock and bond of the same company will be lifted. Insurance companies’ also won’t be restricted in their derivatives investment.

Insurers, however, will be advised to balance out investments if they are overcrowded in a certain company. The limit on running assets of large shareholders or affiliated companies, and cap on loan to the group chairman will remain intact.

An insurer in the future would only have to report to authorities of their plans to establish investment banking or real estate investment subsidiary instead of getting authorization.

Any new product won’t need prior approval from authorities. But insurers would have to go on getting approval for legally-binding products like auto insurance policy.

By Kim Hyo-sung

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