South Korea’s chief financial regulator has announced a number of new policy measures and reforms, including a measure to prevent parents who are estranged from their children from receiving insurance benefits on their children’s death.
The Financial Services Commission (FSC) has drawn up 18 improvements after ombudsman members reviewed improvement tasks focused on streamlining financial regulations, protecting consumer rights and enhancing convenience, reported Korea Bizwire.
The system will be improved by making the nomination of beneficiaries mandatory so that the beneficiary of the insurance money can be explicitly designated in the insurance contract.
There have been a number of instances in which a policyholder died without designating a beneficiary.
In such cases, insurance payments were made to birth parents or mothers according to inheritance rules under civil law even though they might have been estranged from the insured for decades.
The new measure aims to prevent payments from landing in the wrong hands.
The FSC has decided to set out a requirement for the mandatory nomination of the beneficiary of insurance money, in the Financial Consumer Protection Act, which is scheduled to take effect in March of next year.
In addition, there will be a way to receive insurance contracts through short messaging service (SMS) or the Kakao Talk mobile messaging app.
Currently, it is possible to issue insurance contract data through electronic methods if the policyholder agrees to it, but it was unclear whether this was allowed too via SMS or Kakao. When asked to interpret the related statutes, the FSC replied that it is willing to accept the use of these messaging services.