Government moves to put brakes on insurance rates

The new government is moving to curb a raise in auto insurance premiums in a bid to reduce policyholders’ cost burdens despite a worsening business environment for nonlife insurers, industry sources said yesterday

The Financial Services Commission (FSC), the country’s top financial regulator, will apparently talk with new ministries set up by President Park Geun-hye, who had her inauguration ceremony earlier in the day, about ways in which they can turn such a plan into a legitimate policy, an FSC official said.

The nonlife insurance association has reportedly delivered its own proposal detailing possible measures to the FSC, they said.

The focus will likely center on an industry overhaul to bring down prices of parts for imported cars, since the exclusive sales by a few importers have made repair costs too expensive for car owners, hence a higher insurance premium.

According to industry data, imported cars represent about 4 percent of the total number of vehicles on Korea roads and 12 percent of the auto insurance market.