South Korea’s Financial Services Commission (FSC) has revised the standard information consent form used in the insurance sector, changing how policyholder data can be used to support retrocession contracts and related reinsurance arrangements.

New consent structure changes retrocession data-sharing process

Effective January 2, the FSC and the Financial Supervisory Service (FSS) have introduced changes that allow primary insurers to obtain policyholders’ consent for retrocession-related data sharing on behalf of reinsurers. The Korea Life Insurance Association and the General Insurance Association of Korea have incorporated this change into an updated standard information consent form for use across the industry. Retrocession involves a reinsurer (the retrocedent) transferring part or all of the reinsured risk it has assumed from a primary insurer to another reinsurer (the retrocessionaire). Because this secondary transfer requires policy-related information to move further along the chain, reinsurers had previously been required to obtain separate consent directly from policyholders before sharing data with retrocessionaires.
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In practice, that direct consent requirement has been difficult to meet, given that reinsurance transactions are business-to-business and reinsurers typically do not interact with individual policyholders. Under the revised approach, primary insurers may collect the necessary consent from policyholders at the point of sale or during contract administration, covering both reinsurance and retrocession data transfers. The updated consent form enables primary insurers to obtain policyholder permission to share information with reinsurers and retrocessionaires strictly for retrocession-related purposes. The permitted use of this information is limited to retrocession transactions and does not extend to other activities such as marketing or advertising.

Cross-border data transfers and implementation timeline

For retrocession contracts involving overseas reinsurers, the revised framework provides for the possibility that policyholder information will be transferred outside South Korea. In those cases, primary insurers will be required to make available on their websites a list of overseas reinsurers and their state jurisdictions that are eligible to receive policyholder information. The relevant website address will be referenced in the standard consent form so that policyholders can see which foreign entities may access their data in connection with retrocession arrangements.

Insurers are expected to adopt the revised form during the first quarter of 2026 (Q1 2026), after updating internal data-processing systems and documentation. The transition is likely to involve coordination among underwriting, legal, compliance, and reinsurance functions, particularly at companies that use quota share, surplus, or facultative reinsurance programs with retrocessional layers. For global groups and regional carriers that include Korean entities within wider Asian reinsurance networks, the updated consent regime may lead to more consistent handling of data flows across ceded and retroceded layers, in combination with data protection and cross-border transfer requirements in other jurisdictions.

Link to NAIC reciprocal jurisdiction efforts

The consent form revision is also being discussed in the context of Korea’s effort to obtain recognition as a certified and reciprocal jurisdiction with the US National Association of Insurance Commissioners (NAIC). Market participants have linked these changes to broader work on aligning reinsurance supervision and cross-border regulatory treatment. If Korea secures NAIC reciprocal jurisdiction recognition, collateral and regulatory treatment on US-related business for Korean reinsurers and primary carriers using US reinsurers would be governed by the NAIC’s reciprocal jurisdiction framework. Adjustments to retrocession execution and data-use parameters form part of the wider alignment between Korean and international practices.

Commission payment periods extended and linked to policy duration

Alongside the consent form changes, the FSC has approved amendments to supervisory rules governing how and when insurance sales commissions are paid. The revised framework will extend commission payout periods to as long as seven years and link a larger share of remuneration to the length of time policies remain in force. Under a staged approach, from January next year commissions on new policies will be divided into an upfront component and a maintenance commission paid in instalments over four years. This transitional four-year schedule will apply for two years. From January 2029, the instalment period will be lengthened to seven years, with maintenance commissions payable only while the contract remains in force.

According to The Asia Business Daily, an FSC official said: “From January next year, the four-year instalment payment will be implemented for two years, and from January 2029, the seven-year instalment payment will be introduced.” The official added that a long-term maintenance commission will be paid in policy years five to seven so that “the longer an agent maintains a contract, the higher the total commission they can receive.” Under this structure, an agent’s total commission will depend more directly on how long the policy stays active.