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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] South Korea’s Financial Supervisory Service (FSS) has rated Shinhan Life Insurance and KB Life Partners, a subsidiary of KB Life Insurance, as “insufficient” in a mystery shopping assessment of variable insurance sales practices.
The regulator said on March 24 that the evaluation found shortcomings in explaining asset management methods and policyholders’ rights to cancel unlawful contracts. The FSS has instructed the two firms to establish improvement plans and will monitor their implementation.
The assessment was conducted between September and November last year, covering seven life insurers—Samsung Life, Kyobo Life, ABL Life, KDB Life, MetLife Korea, Shinhan Life, and Hana Life—as well as two general insurance agencies (GAs), KB Life Partners and Mirae Asset Financial Services.
Mystery shopping is a system in which trained external evaluators pose as customers to assess whether financial products are sold in compliance with proper procedures. The results are used for institutional improvements and recommendations rather than punitive measures.
Across five categories and 24 evaluation criteria, Samsung Life, Hana Life, Kyobo Life, KDB Life, and ABL Life received the highest rating of “excellent” (90 points or above). Mirae Asset Financial Services was rated “good” (80+), MetLife Korea “adequate” (70+), while Shinhan Life and KB Life Partners were rated “insufficient” (60+). No firm fell into the lowest “poor” category (below 60).
The FSS said the review was conducted amid intensifying competition among life insurers, which has raised concerns over potential mis-selling. First-year premiums for variable insurance reached 2.89 trillion won last year, up 46.2% from 1.97 trillion won a year earlier.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
