South Korea has begun transferring routine general insurance complaints from the Financial Supervisory Service (FSS) to the General Insurance Association of Korea (GIAK), as regulators seek to reduce growing complaint backlogs and focus more resources on complex insurance disputes.
The revised framework, which took effect this month, allows the GIAK to handle selected non-dispute complaints referred by the FSS, beginning with cases involving motor insurance fault ratios, which determine how liability for an accident is apportioned between drivers. Consumers will continue lodging complaints with the FSS, including through the government’s e-People civil petition portal, before the regulator determines whether a complaint should be referred to the association, according to Seoul Economic Daily.
The reform comes as insurance remains the largest source of financial complaints received by the FSS. Last year, the regulator handled 128,419 financial complaints, with insurance accounting for 49.0% of the total. General insurance complaints reached 48,281, an increase of 19.6% from the previous year, while the average processing time for financial complaints rose to 46.6 days, according to Seoul Economic Daily. Financial authorities expect the revised process to improve handling efficiency by allowing the FSS to concentrate on insurance payout disputes, legal issues, and supervisory work while the association manages routine complaints.
The first complaints eligible for transfer include non-dispute disagreements over motor insurance fault ratios, complaints about insurer employee conduct, and enquiries relating to the appointment, dismissal, and commission payments of insurance agents, according to Seoul Economic Daily. The GIAK plans to gradually expand the scope of complaints it handles after reviewing the initial implementation. Motor insurance fault-ratio complaints were selected first because they represent a common source of consumer dissatisfaction. A 2026 survey by the Korea Insurance Research Institute found that 35% of respondents who had experienced a motor vehicle accident believed the fault ratio assigned to their case was unfair.
The GIAK already manages a substantial volume of complaints. During the first quarter of 2026 (H1 2026), the association received 11,108 complaints through its consumer portal, including 7,547 referred by external organisations such as the FSS, according to Seoul Economic Daily. Industry participants expect the formal transfer of routine complaints to streamline processing by reducing duplicate administrative steps. “If the FSS focuses on dispute-related complaints and the association takes charge of simple complaints, the efficiency of complaint processing will improve. In particular, for complaints where the facts are relatively clear, such as car fault ratios, we also expect the effect of shortening processing periods,” an insurance industry official told Seoul Economic Daily.
The complaint-handling changes coincide with broader efforts by the FSS to strengthen oversight of how financial institutions manage consumer complaints. In May, the regulator instructed major banks, insurers, securities firms, and card issuers to submit reports detailing complaint volumes, staffing levels, dispute cases, and plans to reduce complaints. It was the first time the FSS had systematically collected both complaint data and firms’ complaint-reduction strategies, according to The Korea Times.
Under the initiative, companies were also asked to identify whether increases in complaints were structural, seasonal, or temporary and establish quarterly and annual targets for reducing consumer grievances. “The goal is to encourage financial companies to identify the underlying causes of complaints on their own and develop ways to reduce them proactively. Best practices will be shared across the industry, while areas requiring improvement could be addressed through further institutional changes,” an FSS official told The Korea Times.
According to FSS data cited by The Korea Times, financial complaints increased from 93,842 in 2023 to 128,419 in 2025, a rise of 36.9%, with insurance and securities recording some of the largest increases. Industry representatives told the publication that complaint management is increasingly being viewed as part of firms' governance and internal management rather than solely as a customer service function.
The revised complaint framework forms part of a wider shift in insurance supervision announced by the FSS earlier this year. At its 2026 Insurance Sector Financial Supervision Briefing, the regulator said it would introduce joint inspections involving supervisory, product, dispute, actuarial, and inspection teams, while placing greater emphasis on consumer protection throughout the insurance product lifecycle, according to The Asia Business Daily. The inspections will examine product design, sales practices, post-sale management, claims assessment, delegated distribution through general agencies, and insurers’ internal control systems.
The GIAK has been preparing for the expanded role since amendments to the Insurance Business Act enabled insurance associations to assume greater responsibility for routine complaints. According to Chosun Biz, the association established a dedicated Complaint Service Department in July 2025 and planned to increase staffing as the revised framework was implemented. The Korea Life Insurance Association is also reviewing plans to establish its own dedicated consumer complaint unit ahead of the broader rollout of the revised system.
The reforms do not change where consumers submit complaints, but they do change how routine general insurance complaints are processed. As the GIAK assumes a larger operational role and the FSS directs more resources toward complex disputes and supervision, complaint management is becoming a more prominent measure of insurers’ governance, consumer protection practices, and regulatory oversight.
