KOREAN REGULATOR LAUNCHES MOTOR INSURANCE PROBE

South Korea’s Financial Supervisory Service (FSS) has launched an investigation into the country’s five largest motor insurers over possible unfair competition in the sector. The FSS is concerned that the five firms under scrutiny — Samsung, Dongbu, Hyundai, LG and Oriental — have cut premiums excessively to drive out competition. “We decided to launch a special probe in a move to prevent a worst-case scenario where the government has to inject public funds into [the insurers]”, noted FSS official Park Byong-myong. The regulator said recently that it wanted locally registered motor insurers to set rates according to market conditions, without regulatory intervention, but what it described as “reckless premium cuts” had forced its hand. The FSS had originally agreed with the 11 insurers in the market that rates would rise by 3.5%, but premiums have subsequently fallen among the top five by an average 5%.