Korea (The Republic of) Insurance Information

CIA link to demographic/economic data on Korea

General Korean Insurance Information

• Compulsory Insurance:
  
  1. Third Party Automobile Liability – the limits for death and permanent disability have been increased to KRW 100mn [US$95,602] while the limit for other bodily injury was increase to KRW 20mn [US$19,120] and third party property damage was made compulsory with a minimum indemnity limit of KRW 10mn [US$9,560] – per legislation amended on February 22, 2005;
  2. Workers’ Compensation;
  3. Fire and Liability coverages for buildings with public assembly occupancy;
  4. Medical Insurance (employers with more than 5 employees);
  5. Unemployment Insurance;
  6. Nuclear Liability;
  7. Aviation Liability (civil aircraft).
• Non-Admitted Insurance:
  Prohibited, but laws are being relaxed.
• Policy Wordings & Rates / Tariffs Controlled:
  Strict. Property, Automobile, Employer’s Liability and Personal Accident coverages are subject to tariff rating.
• Policy Language:
  Korean or English.
• Types of Insurance Restricted to Government Institutions:
  Workers’ Compensation; Medical Insurance; Unemployment Insurance.
• Policy Currency:
  South Korean won (KRW). U.S. $ insurance is available for Marine and Foreigner’s Automobile Liability coverages.
• Currency Restrictions / Exchange Controls:
  Restricted and controlled by the Foreign Exchange Control Laws.
• Policy Period:
  Annual.
• Cancellation Provisions:
  Written notice. Check policy cancellation provisions of each policy.
• Premium Tax, etc. paid by Insured:
  None other than nominal policy issuance fees (100 won per policy).
• Insurance Companies:
  
• Brokers:
  Brokers are generally not allowed to deal with direct business.
• Brokerage Commissions:
  
• Broker of Record Letters:
  Recognized and used principally by foreign multinational companies with Korean exposures.
• Reinsurance:
  No reinsurance may be placed abroad until a compulsory 20% cession has been made to Korean Reinsurance Company (KRIC) and all local market capacity has been exhausted. Cessions differ according to class of business. Changes are being made so local inquiry suggested. There are no withholding taxes deducted from reinsurance cessions.
• Local Natural Hazards:
  Hail, windstorm, typhoon, flood.
• Other Information:
  

Property Insurance

• Fire:
  Standard fire perils follow F.O.C. (foreign) form and American standard perils. Usual exclusions include: earthquake, riot, windstorm, terrorism, explosion, atmospheric disturbances. A special perils endorsement is available.
• All Risk:
  Available.
• Coinsurance:
  100% for industrial risks.
• Blanket Insurance:
  Available.
• Business Interruption:
  UK Loss of Profits and U.S. Gross Earnings forms are available.
• Replacement Cost:
  Available.
• Discount for fire protection equipment / systems: Available - maximum rate credit 60%.

Boiler & Machinery / Machinery Breakdown / Engineering

• Wordings:
  Local, U.S. and UK.

General / Public Liability

• Available Wordings:
  Commercial General / Public Liability forms available.
• Comments:
  Coverage is written on an occurrence basis.

Automobile / Motor

• Compulsory Limits:
  Bodily Injury: W80,000,000 (death and total disability per person); injury W15,000,000. (Note: Double check with local authorities, death and total disability limit may be increasing to $150M or $120M) Property Damage - not compulsory.
• Comments:
  Coverage applies to the Insured and any licensed individual driving with the Insured’s permission. Passengers are deemed to be Third Parties.

Workers’ Compensation

• Comments:
  All employees are subject to WC Act. Coverage is compulsory for companies employing then a handful of people. Medical Expense and Occupational Disease benefits are payable under the Act.

Marine

• Available Wordings:
  Follow the Institute of London Underwriters’ clauses. War Risks rates follow London scale.

Crime

• Available Coverages:
  Fidelity, Money & Securities, Theft and Surety Bonds.