South Korea: Lloyd's registration and trading requirements

Lloyd’s is now registered as a foreign insurer in South Korea, according to the Guidelines on the Cross-Border Sale of Insurance Products, first published in 2012. Consequently, Lloyd’s is permitted to write the following classes of Korean business on a cross-border basis:

• Export and import cargo 
• Marine hull  
• Aviation
• Travel
• Long-term PA
• Insurance business declined by at least three domestic insurers or business which the regulator, the Financial Supervisory Service (FSS) has approved for non-admitted placement - for further details please see Crystal.

This registration and permission to conduct cross-border insurance business is accompanied by new disclosure requirements, which must be observed in all contract related documentation.  Article 6 of the Guidelines on the Cross-Border Sale of Insurance Products, requires that the following disclosures are made to prospective policyholders in every cross-border sale:

• The insurer’s name, head  office location, location of a  relevant branch  (if any), Internet website address, email address, and telephone number;
• Whether the insurer has reported to the FSS in accordance with Article 4 of the Guidelines;
• That the insurer is not licensed, incorporated or represented in Korea;
• That the insurer is not supervised by the FSS, and
• That its products are not covered by Korea's policyholder protection scheme.

A model wording which meets these disclosure requirements has been provided here (LMA9101), but an alternative format may be used as long as all of the above are included.