Items	EUCCK's Proposal	Comment
Cross Selling	EUCCK member insurers operating in Korea would like to underscore the fact that in no other advanced insurance markets there is any such law or regulation that forces an insurance company to allow its tied sales force to be an agent of another insurer, or any law that prohibits exclusive relationship with its agents. In the US, it is legal to have “captive” or “tied” agents, namely, exclusive agents by contract. In other words, there exists no law to force life insurance companies to allow their tied agents to become agents of another non-life insurer, and vice versa, in the US. Also, in Europe, tied agents are allowed as there is no limitation imposed on an insurer's ability to contract with its agents. EU directive has focus on the status of the individual sales person, tied or untied, independent from the organizational structure s/he belongs to. In addition to the freedom of contract principle, it should also be considered that insurance companies have invested a tremendous amount of time and efforts to train and manage their sales forces and provide a sales infrastructure at its cost. As such, it would only be fair for an insurer to be allowed to keep their agents on an exclusive basis by contract and by law. At any time it can be in the discretion of insurer and solicitors to agree on a general agent contract principle which reflects the freedom of choice of a solicitor. After all, it should be left with the market to dictate whether an insurance company has agents of multiple relationships with other insurers or on an exclusive basis.   The European insurance companies in Korea wish to be allowed to become distributor/ agent/broker of another insurance company as an incidental business, by clarifying the above-discussed provision in the IBL Enforcement Decree. Company-level cross-selling is already permitted in Europe, as there exists no limitation in any insurer to partner with any other insurer and all sales channels for an insurance company in Europe have no limitations in terms of the number of co-operations, volume, products and sales volume. Clarifying the IBL Enforcement Decree would also be consistent with the 2003 IBL amendment, which allowed more incidental businesses for insurers, as well as the practice in other advanced markets.	Cross-represent program is invited to prevent weakening the base of insurance solicitors following the introduction of Bancassurance, and the way of cross-represent -each solicitor can select insurance company as an cross-represent - is ruled to protect the rights and interests of solicitors. The way of cross-represent that one insurance company becomes as an agency of another insurance* company is rejected. * The way that one insurance company resisters as a insurance agency of another company cooperating with another insurance company and then under insurance solicitors sell the products as invited employees (represents). The way of cross-represent that insurance company becomes insurance agency of other insurance company has an advantage on education and management of insurance solicitors, consumer protection, inner control, and etc, but the way of cross-represent as insurance agency has difficulties, at this time, due to disadvantages such as disturbance of capability of insurance solicitors' choice of company, incensement of invitation commission, and etc.
Credit Card Payment of Insurance Premiums	European member insurers in Korea recommend that Article 19, Paragraph 1 of the Credit Business Act be amended so that insurance companies are exempted from the said requirement and permitted to decline credit card payments for certain premium payments, e.g., savings/investment-linked insurance products. One way to achieve this might be to amend the said provision in a ‘Negative' way, i.e., listing cases where credit card payment may be declined.	According to present Specialized Credit Financial Business Act Article 19, Credit Card Merchants shall not refuse to sell goods or to provide services or treat card holders unfavorably, because of transaction by credit card.
Banc-assurance	The foreign financial industry strongly supports the full liberalization of bancassurance according to the original plan and recommends the National Assembly to further pursue this process in earliest possible opportunity. The liberalization of bancassurance will benefit the consumers in terms of wider choice of products and a more competitive insurance market. It must be the free decision of the customer where to purchase his insurance cover.   The restriction on the number of people allowed to complete insurance sales in each branch should be removed, to allow consumers greater access to qualified individuals who can assist them with their long-term savings and protection needs. This will help raise awareness and consideration of long-term saving and protection of families' financial security, as part of their overall financial portfolio.	On the National Assembly discussions, the withdrawal of expended operation of Banc-assurance into level 4 is decided after considering various side effects*.(Feb. 2008) * expected side effects: ①customer damages like mis-selling, compelling an insurance contract with loans ② deepening imbalance in financial industry like unfair partnership agreements between banks and insurance companies, weakening the sales of small and medium insurance companies and etc. ③weakening the base of solicitors, possibility of solicitors' unemployment s and etc.
Product Development	The announced plan to increase ‘File & Use' category of products poses the risk of strengthening regulatory intervention of product development process, contrary to the stated purpose. Rather, the purpose of autonomy or deregulation of product development process will be better served if the current regulation or regulatory guideline contains more specific provisions to relax some of the current regulations applied to product development activities of insurers.	The reform of system to guarantee the maximum autonomy of product developments of insurance company, such as impartation of free products without submission process to the Financial Supervisory Service and etc, is on the progress.     The reporting standard in initial operation will do not expand the ratio of reporting products but plan as conservative establishment for stable establishments of free product system and consumer protection.
Level Playing Field for Reinsurance Companies	It is expected that implementation of these, or similar guidelines, will better serve to protect local insurers and their policyholders. It will serve to attract further foreign reinsurers to establish branch operations creating a competitive, but fair, reinsurance industry.	On April 2009, the RBC(Risk Based Capital) system is initiated,   and when calculating credit risk in RBC system, a risk coefficient of reinsurer's credit raking is applied.
Commercial Freedom to Operate	As long as customers are properly protected (sound solvency situation), insurance companies should be allowed the commercial freedom to choose their partners, to set commission systems, and to set prices for their products, according to relevant calculations and reflecting evidence-based data. This should be particularly the case for short term insurance products.	(Freedom to outsource asset management services)   There is no obligation of an open tender process in insurance related laws, when outsourcing asset management services.   However, when domestic business unit of foreign financial firm make contract with specially related party, such as it's head office, according to “Best Practice for Transactions between Domestic Business Units of Foreign Financial Firms and Specially Related Parties” of FSS,   Domestic business units of foreign financial firms should conduct business with specially related parties under conditions generally applied in transactions with independent third parties that are not specially related parties. (Freedom to set an commission base for solicitors) To diversify the imposition way of business costs from current only way of frontend loaded, permitting the backend loaded costs on saving linked insurance is under consideration. (Freedom to set cover and prices for insurance products) Since the liberalization of insurance prices in April 2004, insurance company is free to decide their insurance premium and develop own package insurances based on its experiences and others.
Evaluation of insurance company's business results	Insurance companies should be able to receive approvals for additional insurance items if their business plan and current financial condition (including FDI impact) create a believable ground to fulfilling the mentioned business plan and as long as requested solvency margins are met or guaranteed. This approach would better prevent an overall market failure.	According to the current law, the condition of new entry to insurance industry and that of the existing companies' adding the insurance item are same. So, the problems that is impossible to exam that existing companies' business performance, financial status, any violation of economic violation, who will add the insurance item, is occurred.     Thus, we will prepare the amended bill contains the separation of the conditionality, like the examination of a large shareholder for newly entering company and the examination of current status for the existing companies.
Group Credit Payment Protection (“Group CPP”) insurance	In order to activate the Group CPP business, of which the benefits are well proven in advanced markets, the Guidelines that unduly discourage lender financial institutions from engaging in the Group CPP subscription should be lifted, i.e., the lender financial institutions should be allowed to receive an appropriate level of handling fees from either borrowers or insurers, at least to recoup their costs necessary to be incurred for engaging in the business.	Group CPP insurance is the contract between lender financial institution and insurance company, so it is not possible to charge handling commission except insurance premium to borrower and if lender financial institution got commission from insurance company, it is the violation of regulations such as prohibition of rebate.   We are hard to allow that the lender financial institution's handling commission.