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Korea to ease capital requirement for insurers

Published: 12 Mar. 2025, 17:03

Office of the Financial Services Commission in central Seoul [YONHAP]

Korea's financial regulator said Wednesday it planned to ease capital adequacy requirements for insurance companies to help lessen their burdens and raise the quality of their capital base.

The Financial Services Commission seeks to lower the so-called capital adequacy ratio under the Korean Insurance Capital Standard (K-ICS) to between 130 percent and 140 percent.

Since 2001, insurance companies here have been advised to maintain a capital adequacy ratio above 150 percent.

The ratio refers to the amount of available capital compared with required funds and indicates financial soundness. Firms are required to keep the ratio above 100 percent.

In 2023, the regulator introduced the K-ICS, under which insurers have been in a rush to raise capital to meet required funds, which in turn increased their financial costs.

The average capital adequacy ratio of insurance firms stood at 218.3 percent as of end-September.

Yonhap