SEOUL, Feb. 5 (Korea Bizwire) — The minimum paid-in capital requirements for the establishment of insurance companies will be greatly eased to stimulate the market for ‘mini insurance’ businesses that specialize in everyday life-related insurance products such as policies for pets and travelers, South Korea’s financial authorities said Thursday.
The Financial Services Commission announced that it will issue an advance legislation notice for the revised enforcement ordinance of the Insurance Business Act by March 17.
Thus far, there has been a requirement for more than 30 billion won (US$26.7 million) paid-in capital to establish an integrated insurance company.
The revision, however, will lower the minimum paid-in capital requirement to 2 billion won, aimed at promoting the establishment of mini insurance companies with specialty in short-term small-amount insurance products, as well as spurring the release of innovative insurance products that can satisfy various consumer needs.
The mini insurance companies can offer all types of insurance products excluding those that require long-term guarantees (pension and nursing) and high capital base (nuclear energy and automobiles, etc.).
Based on considerations of the need to protect consumers, the maximum amount of insurance coverage will be limited to 50 million won for the mini insurance companies, whose annual gross income premium will also be limited to 50 billion won.
Ashley Song (firstname.lastname@example.org)