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Photo = Yonhap news |
[Alpha Biz= Reporter Kim Sangjin] Several South Korean life insurance companies have been fined for engaging in “unfair replacement” practices, which involve persuading policyholders to switch to similar insurance products before the maturity of their current policies.
The Financial Supervisory Service (FSS) announced on December 2 that fines totaling 4.46 billion KRW were imposed on nine life insurers, including Samsung Life, Mirae Asset Life, Hanwha Life, and Tongyang Life.
Unfair replacement occurs when insurance agents encourage consumers to switch policies under pretexts such as “insurance remodeling” or “enhanced coverage.” This practice primarily aims to secure higher sales commissions while potentially disadvantaging policyholders.
Samsung Life received the largest fine of 2.02 billion KRW for 114 cases of unfair replacement carried out by agents and sales organizations between March 2019 and March 2021. Mirae Asset Life was fined 926 million KRW for 34 cases, Hanwha Life 766 million KRW for 98 cases, and Tongyang Life 366 million KRW for 87 cases.
Other insurers fined include Shinhan Life, iM Life, Heungkuk Life, ABL Life, and Fubon Hyundai Life.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
