SEOUL, Aug. 22 (Korea Bizwire) — A new measure will require consumers to be provided with information of sudden changes in returns for variable life insurance funds via text message.
The measure comes as critics have condemned the lack of information regarding fund returns, making it difficult for consumers to take active countermeasures.
The Financial Supervisory Service announced the measure in conjunction with the Korea Life Insurance Association.
Following the measure, insurance companies must provide clients with monthly text messages that contain information on the status of their insurance policies, including data on funds linked to their subscriptions.
Considering that in the past, insurance companies released the information every quarter in written form, the reporting cycle has been shortened. In addition, information on returns will be provided in more detail.
Previous reports offered only a general picture of the returns, while future reports will include information on the value of insurance premiums invested in each fund and the actual returns obtained.
By providing more detailed information, insurance companies hope to alleviate consumer fears that their entire premiums are being invested in the various funds.
In addition, a new system will be put in place to provide consumers with text messages, within three days, when returns from funds reach a certain low or high point to be designated by the consumer beforehand.
This is expected to help rectify the current situation that prevents consumers from taking appropriate action on time, as they are currently being left in the dark about changes to fund returns.
The new measures will be tested out on a trial basis in the second half of this year, and will be implemented in full next year following a step-by-step enactment process.
H. S. Seo (email@example.com)