The insurance coverage business is watching whether or not lawmakers will cross a Invoice to lift the higher restrict on insurers’ abroad investments, as development of the home insurance coverage business is slowing down as a result of persistent low rates of interest.
Most life insurers are growing their investments within the abroad markets to hunt new development engines and make up for losses within the home territory, reported The Korea Occasions.
“Most life insurers are struggling worsening profitability because of the low rate of interest right here, however the authorized hurdle prevents them from increasing additional into extra worthwhile markets,” an official from the business mentioned.
In accordance with native insurance coverage regulation, insurers’ international funding quantity mustn’t exceed 30% of their whole working property. However the ruling Democratic Celebration of Korea is pushing for a regulation revision to lift the cap to 50%.
Voices are rising for regulators to lift the higher restrict for insurers’ abroad funding quantity or scrap the restriction. On prime of that, the regulation is barely utilized to insurers, whereas different monetary sectors are allowed to make international investments freely.
Some insurers are approaching or have exceeded the present 30% restrict of their abroad investments. Fubon Hyundai Life Insurance coverage was just lately fined for exceeding the higher restrict in June 2019.