The Financial Services Commission has proposed amendments to insurance supervisory rules that would strengthen oversight of actuarial assumptions used to value liabilities under IFRS 17. Insurers would submit an annual report to the Financial Supervisory Service covering the basis, methodology, changes and validation of assumptions, as well as cash flow modeling and internal controls. They would also establish internal control standards for setting and changing assumptions and report any changes made during the year, including their financial impact, to the board risk management committee. The amendments would add duration gap measures to insurers’ quantitative interest rate risk assessments and public disclosures. They would also assess insurers’ management of operational risks arising from sales outsourced to corporate insurance agencies, with planned ratings from one to five based on indicators such as mis-selling and policy retention rates and resulting adjustments to K-ICS ratios. Other changes include limiting property project finance credit exposure to 20% of total assets, revising contingency reserve calculations and financial statement presentation, and allowing certain fifth-generation medical expense insurance conversions to be attached to existing main policies. The actuarial assumption reporting requirement is scheduled to take effect on Dec. 31, 2026, with most other amendments taking effect on Jan. 1, 2027. The medical expense insurance design change would apply immediately after approval, while detailed quantitative rules for corporate insurance agency risk assessments will be introduced separately.

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