The South Korean government plans to lower reinsurance market entry barriers to promote competition by carving out reinsurance from non-life insurance regulations.
The current Insurance Business Act regards reinsurance as a part of non-life insurance. As such, the same regulations are applied to both reinsurance and non-life insurance despite the fact that reinsurance is not for individuals but for insurance companies, reported Business Korea.
In other words, relatively excessive regulations for consumer protection have been applied to reinsurance in spite of the fact that it is used by those well aware of insurance.
Details of the proposed change are set to be discussed with reinsurance companies, industry associations, etc.
At present, every licensed non-life insurer can carry out reinsurance business without any request for approval.