[THE INVESTOR] Limitations on insurance companies’ investments will be lifted in a bid to help insurers improve finances.
The Financial Services Commission said on June 27 that a number of revisions to related laws will be made, and submitted to the National Assembly around September.
As part of the measures, the ceiling on overseas real estate and foreign currency insurance companies can hold will be removed.
In addition, the limit on bonds, shares and derivatives issued by a single entity will also be lifted. However, the FSC will require insurers to secure more liquidity according to the risks should an insurer’s investments be concentrated on a single entity.
Current regulations include limiting the value of derivatives an insurer can invest to 6 percent of its assets.
Along with the lifting of ceilings on various investment vehicles, insurers will be allowed to establish financial and real estate-related subsidiaries without government approval. Once the regulations are changed, insurers will be required to simply report the changes when such subsidiaries are set up. Until now insurance companies were required to obtain government approval.
Insurance companies will also be allowed to market new insurance policies without receiving approval first. Car insurance and other polices required by law will continue to require approval.
By Choi He-suk (
cheesuk@heraldcorp.com)