"20 Billion Won Each for South Gyeongsang, Gyeongsangbuk-do, Gwangju, Jeollanam-do, North Jeolla Province, Jeju Province and North Chungcheong Province"... Insurance Industry Unveils Free Mutual-Benefit Insurance

[Financial News] The insurance industry will launch free mutual-benefit insurance products for small business owners and vulnerable groups in cooperation with seven local governments. The products, which will be rolled out sequentially starting in September, were funded at 2 billion won per local government, or 14 billion won in total.
According to the financial authorities on the 1st, the insurance industry is promoting a mutual-benefit insurance project for vulnerable groups together with seven local governments: South Gyeongsang Province, Gyeongsangbuk-do, Gwangju, Jeollanam-do, North Jeolla Province, Jeju Province and North Chungcheong Province.
The life insurance industry and the non-life insurance industry will each raise 15 billion won, or 30 billion won in total, to support free mutual-benefit insurance enrollment for vulnerable groups.
Life insurance products will be introduced as credit life insurance in six local governments: South Gyeongsang Province, Gyeongsangbuk-do, Gwangju, Jeollanam-do, Jeju Province and North Chungcheong Province. Credit life insurance is a product that repays a loan with insurance payouts of up to 10 million won if a small business owner dies or is diagnosed with a major illness such as cancer, cerebral hemorrhage or acute myocardial infarction.
Any insurance payout that exceeds the principal and interest on the loan will be paid directly to the insured. The product will be launched sequentially from September 1. In South Gyeongsang Province, enrollment will begin in October after administrative preparations are completed. Jeju Province and North Chungcheong Province will accept individual applications after public notices through their designated implementing agencies, while South Gyeongsang Province, Gyeongsangbuk-do, Gwangju and Jeollanam-do will select eligible recipients and notify them by SMS. Policyholders will receive coverage for one year.
Small business owners who enroll in the mutual-benefit insurance can receive an additional preferential interest rate of up to 0.3 percentage point on loans from IBK. For new Sunshine Loan borrowers, the first-year guarantee fee rate will be reduced by 0.3 percentage point.
Non-life insurance products will be launched in all seven local governments. They were developed to reflect the characteristics of each region. In South Gyeongsang Province, a fire liability insurance product that covers third-party damages caused by restaurant fires up to 10 million won will be launched in October. In Gyeongsangbuk-do, a business interruption loss compensation insurance product will be introduced in September, covering lost operating income for up to 50,000 won per day in the event of hospitalization due to illness or injury. Gwangju and Jeollanam-do will each launch products in September: business liability insurance that covers third-party damages from business-related accidents up to 30 million won, and safety insurance that covers accidental death or work-related injury for young small business owners.
North Jeolla Province will follow up on the storm and flood insurance deductible support launched on June 15 with a comprehensive insurance product for small business owners with annual sales of 300 million won or less in September. Jeju Province launched a climate insurance product on July 28 that covers income losses from work stoppages caused by heatwave warnings. North Chungcheong Province will launch Cyber Insurance in September, covering phishing and fraudulent payments resulting from lost mobile phones for up to 3 million won.
The non-life insurance products will be automatically enrolled without a separate application if the insurance conditions are met in the relevant region, except for North Jeolla Province's storm and flood insurance, which requires a separate application. Insurance claims must be filed directly by the eligible person with the insurer's reception desk or other designated channels, and proof of continued eligibility and other requirements will be needed.
The industry had previously signed a business cooperation agreement with North Jeolla Province for the first mutual-benefit insurance project, then selected six local governments through a nationwide local government call for proposals and formed a Working Group to prepare the product launches.
The Financial Services Commission (FSC) plans to work with local governments and the insurance industry to support smooth enrollment and operation of the mutual-benefit insurance products. Discussions are also under way on how to use the remaining mutual-benefit fund in an integrated way to identify vulnerable groups such as elderly people living alone and seniors, while providing non-financial support such as free insurance, health management and medication guidance.
[email protected] Park Moon-soo Reporter