Over the past three years, life and non-life insurance companies have paid more than 500 billion won annually in deposit insurance premiums. The Deposit Insurance Corporation has proposed increasing the non-life insurance premium rate to 3.3 times the current level, while the life insurance rate would rise to 2.7 times. The insurance industry is demanding a recalculation of rates that reflects the contract transfer system and solvency levels.
According to financial sources on November 3, the Deposit Insurance Corporation and the Life and Non-Life Insurance Association are expected to discuss the premium rate revision plan further at the end of this month. During a meeting on October 30, the industry expressed concerns about the financial burden, prompting the Deposit Insurance Corporation to consider lowering the proposed rates.
Under the proposal, the non-life insurance premium rate would increase from 0.15% to 0.50%, marking the largest increase among financial sectors. The life insurance rate would rise from 0.15% to 0.40%. Banks would see their rates increase from 0.08% to 0.13%, financial investment firms from 0.15% to 0.22%, and savings banks from 0.40% to 0.54%.
The non-life insurance sector's deposit insurance payments have increased annually, reaching 223.3 billion won in 2023, 239.4 billion won in 2024, and 250.4 billion won in 2025. In the same period, the life insurance sector paid 346.8 billion won, 321.7 billion won, and 281.9 billion won, respectively. The combined payments from both sectors decreased from 570.1 billion won in 2023 to 532.3 billion won in 2025, but remained above 500 billion won for three consecutive years.
If the proposed rate increases are applied to last year's payments, the annual burden for life and non-life insurance would rise to approximately 1.59 trillion won, nearly three times the previous year. This calculation reflects only the rate changes, keeping the reserves and premium income used for determining the deposit insurance unchanged.
Deposit insurance is a fee collected from financial companies to protect depositors and policyholders in the event of a financial institution's insolvency. Insurance companies calculate the deposit insurance premium by multiplying the average of their reserves for future claims and premium income by the applicable rate.
The insurance industry argues that since there is a contract transfer system allowing the transfer of policies from insolvent insurers to other companies, the potential burden on the fund should be reflected in the rates. They also contend that solvency indicators, such as the solvency ratio (K-ICS), should be considered. The upcoming discussions at the end of the month are expected to focus on how much the Deposit Insurance Corporation will adjust the proposed increases.
* This article has been translated by AI.
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