Kim Yongtae, GA Association Chairman: "Treated as Other Service Businesses Despite Sales Exceeding 1 Trillion Won... Insurance Sales Specialist Companies Must Be Introduced"

Clarify the Legal Status and Responsibilities of Large GAs
Specify Registration Requirements, Compensation Funds, and Internal Control Obligations
Curb Excessive Competition to Recruit Insurance Planners

Kim Yongtae, chairman of the Korea Insurance Agency Association (GA Association), expressed a strong commitment to introducing a “specialized insurance sales company” system, saying that GAs should be given legal status and responsibilities commensurate with their growth.

Speaking at a press briefing in Gwanghwamun, Seoul, on November 5, Kim said, “We are willing to actively accept revisions during National Assembly discussions, even if they amend the bills already introduced to impose clearer and stricter responsibilities on specialized insurance sales companies.”

In August, Rep. Joo Hoyoung of the People Power Party sponsored a bill to amend the Insurance Business Act, proposing the establishment of specialized insurance sales companies. In September, Rep. Min Byeongdeok of the Democratic Party of Korea also sponsored a bill focused on assistance with and handling of insurance claims, liability for damages arising from the solicitation activities of affiliated insurance agents, and consumers’ right to choose whether to seek compensation. Min’s office plans to hold a related legislative forum on November 20.

Kim said the purpose of introducing specialized insurance sales companies is to clearly define the legal status and responsibilities of large GAs and strengthen their accountability to consumers. He said there are limits to managing large GAs with sales exceeding 1 trillion won through administrative sanctions alone, and that their roles and legal responsibilities should reflect their scale of sales and staffing levels.

“There are limits to consumer protection if large GAs, which account for the largest share of the sales channel in practice, are treated as ordinary service businesses as they are today and controlled solely through the administrative authority of financial regulators,” Kim stressed.

He also cited Japan, which has a similar system. In 2016, Japan introduced a system for large, specified insurance solicitors similar to that of specialized insurance sales companies, establishing their legal status and putting in place various consumer protection measures.

“In Japan, GAs subject to legal regulation handle more than 2 billion yen in recruitment commissions from life and non-life insurance combined,” Kim said. “By that standard, 70 of the 73 large GAs in Korea currently exceed 2 billion yen in recruitment commissions.”

He also outlined plans to reform the system by assigning legal responsibility to GAs to improve consumer redress and the effectiveness of supervision. “We will specify registration requirements, resources for compensation, and internal control obligations,” Kim said.

Kim also presented tasks for the qualitative growth of the GA sector. He said the association would increase transparency and accountability in the product sales process while building a system to curb excessive competition to recruit insurance agents. He added that it would strengthen its response system for financial security incidents through cooperation with relevant organizations, including the Financial Supervisory Service and the Financial Security Institute.

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