South Korea: Lloyd's registration and trading requirements
Lloyd’s has registered as a foreign insurer in South Korea. This registration permits Lloyd’s to write certain classes of business on a cross-border basis but it also brings with it certain disclosure requirements, which must be met in all contract related documentation.
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
- 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.