ASEAN-Korea Financial Cooperation Centre

Financial Cooperation Note Series Vol. 8

Overview and Implications of the Korean Policyholder Protection Scheme

Table of Contents

1. Overview of the Insurance Policyholder Protection System

2. International Examples of Policyholder Protection Schemes

3. Korean Policyholder Protection Scheme

4. Implications

Introduction

The insurance industry plays a critical role in the economy, and insurer failures can have significant negative effects on policyholders and the broader economy. Effective regulation and supervision are essential to prevent these impacts, and a timely, orderly resolution of insurer failures is necessary to protect policyholders' interests. The concept of policy holder protection includes both preventive measures - such as prudential regulation to ensure the solvency of insurers and fair market conduct - and post-failure measures to mitigate losses for policyholders, insureds, and beneficiaries in the event of an insurer's insolvency.

This report will focus specifically on the mechanisms and importance of post-failure protection measures within the insurance policyholder protection framework.

ASEAN-ROK Financial Cooperation Centre