South Korean regulators plan to introduce competition into the country's reinsurance market by allowing domestic newcomers to compete with Korean Reinsurance Co.
The Financial Services Commission and Financial Supervisory Service said June 4 that they will "actively" license new reinsurers that meet capital and reinsurance business adequacy requirements.
On the demand side, the regulators will implement a set of measures to reduce the domestic nonlife insurance industry's dependence on reinsurance for commercial insurance coverage. Insurers will be required to use judgment rates instead of rates quoted by reinsurers when pricing commercial insurance contracts, beginning with large insurers in the second half of 2018.
The regulators will also place a minimum ratio on the amount of commercial insurance to be retained in order to require nonlife insurers to take more of their commercial insurance underwriting risk instead of buying reinsurance coverage.
