New entry rules for South Korea insurers

New entry rules for South Korea insurers

Financial regulators in South Korea are set to loosen entry regulations for niche insurance entities. The effect will be that more boutique brokerage and specialty insurance players will be able to enter the country’s market.

South Korea’s Financial Services Commission and Financial Supervisory Service recently released an outline of the changes that will be implemented; capital requirements will be lowered for insurers and brokers offering specialty and customised retail services, in an effort to broaden consumers’ choice of options. At present, under existing law, insurance companies need a minimum of US$28 million in capital plus a permit to start operating in South Korea.

Korea’s Government has been inspired to loosen regulations are observing the way things work in Japan; the Japanese market allows smaller entities to start operating with much reducted capital requirements. It is hoped that South Korea’s market will be broadened by the changes.