KOREAN REGULATOR LOOKS AT “DISCRIMINATORY” MOTOR INSURANCE PRACTICES

South Korea’s Financial Supervisory Service (FSS) has reportedly sent notification letters to local insurers informing them of a new regulation that requires them to accept all motor insurance applications except in unusual situations, such as when an applicant has three claims or more in the previous three years, or when there is a record of insurance fraud. There were said to have been complaints from drivers that insurers were rejecting some applicants with clean records over the previous nine years because the profit margin on such drivers was too low. Other drivers finding difficulty in obtaining cover were young drivers, those who lived in areas where accidents were common, and owners of expensive imported vehicles. In the past, these groups had gone to the local equivalent of a residual pool, operated by a consortium of Korean non-life insurers. The FSS said that “the discriminatory practices by some non-life insurance companies are causing consumer dissatisfaction and hurting the credibility of the whole insurance industry”.