The Financial Services Commission announced that an update has been made to the standard information consent form in the insurance industry (Jan. 2, 2026) to promote retrocession contracts, which will help insurers spread out risk and enhance stability in claims payouts for policyholders.
Retrocession is a reinsurance agreement in which a reinsurer (retrocedent) transfers part or all of its reinsurance risk it has assumed from a primary insurer to another reinsurer (retrocessionaire) for the purpose of managing risks more stably. In order to carry out retrocession transactions, separate consent is required from policyholders for providing information to another reinsurer (retrocessionaire). However, considering the nature of business-to-business (B2B) transactions in reinsurance, it remained difficult for reinsurers to obtain consent directly from policyholders, which has been an impediment for retrocession transactions thus far.
In this regard, to promote retrocession contracts, the Financial Services Commission and the Financial Supervisory Service have allowed primary insurers to obtain consent for providing information directly from policyholders in place of reinsurers for retrocession transactions. Following this, the Korea Life Insurance Association and the General Insurance Association of Korea have made an update to their standard information consent form.
Key Revision Details
With the revised standard information consent form, primary insurers will be able to obtain consent for providing information from policyholders in place of reinsurers for retrocession purposes.
The purpose of information use for reinsurers (retrocessionaires) is restricted to retrocession contracts only, permitting them to use information about policyholders only for retrocession transactions purposes. The use of information for other purposes, such as marketing and advertising, will be strictly prohibited.
Retrocession contract with an overseas reinsurer may lead to overseas transfer of information. In this case, policyholders will be able to check the list of overseas reinsurers and their state jurisdictions that are able to receive information about the policyholder on the website of the primary insurer stated on the standard information consent form.
Expectation and Further Plan
The updated standard information consent form in the insurance industry is expected to promote retrocession contracts, which will help to spread out risk for domestic insurers and enhance stability in claims payouts for policyholders, thereby improving the risk-taking capacity of domestic insurers. The revised standard information consent form will be adopted by insurance companies in the first quarter of 2026 after each insurer makes relevant update to its data processing system.
Meanwhile, with the revised standard information consent form in place, it is anticipated that the process will resume for Korea to gain the status of a certified and reciprocal jurisdiction with the U.S. National Association of Insurance Commissioners (NAIC). This will provide more opportunities for Korean insurance companies to expand their business operations in the U.S. reinsurance market.
* Please refer to the attached PDF for details.