South Korea’s ruling and opposition parties are advancing legislation that would grant large general agencies (GAs) formal rights to negotiate sales commissions directly with insurers – a structural shift in a channel that handles the overwhelming majority of the country’s insurance sales.
Bills introduced in August by lawmakers from the People Power Party and the Democratic Party of Korea would allow qualifying GAs to register as “insurance sales specialist companies,” according to Chosun Biz. If enacted, this would be the most significant formal expansion of GA authority since a comparable proposal failed in 2008.
The scale of what is being regulated gives the commission provision its commercial weight. According to the Korea Life Insurance Association’s (KLIA) 2024 consumer survey, 96.1% of life insurance policies examined were purchased through face-to-face channels such as agents. Agency channels accounted for approximately 48% of South Korea’s combined life and non-life insurance market by distribution share in 2025, according to Mordor Intelligence. Data from the Korea Insurance Development Institute (KIDI) shows non-life insurers alone had 28,916 registered agencies as of 2024.
Some of those agencies have grown into substantial businesses. Hanwha Life Financial Services – one of South Korea’s largest GA operators – posted revenue of KRW2.44 trillion (approximately US$1.8 billion) in 2025, a 7.4-fold increase in five years, and had a total planner network of 34,608 across its subsidiaries, according to Seoul Economic Daily. The company is pursuing further acquisitions and an IPO.
That scale is what makes the commission negotiating provision in the proposed bills commercially significant – and contested.
Read next: South Korean insurer consolidation narrows the field for brokers
GAs currently operate as sales organizations. Both bills would allow those meeting eligibility criteria and maintaining consumer protection systems to convert to a new specialist company designation.
Converted companies could handle insurance contract maintenance, claims intake on behalf of customers, and small insurance payout processing. More significantly, they would gain a legal basis to negotiate directly with insurers on commissions and business expenses across certain lines.
A financial industry official quoted by Chosun Biz stated the concern directly: “We agree with the intent to strengthen the expertise of GAs, but safeguards are needed to prevent intensified competition among insurers over sales commissions due to the expanded bargaining power of large GAs.”
The risk is that insurers competing to access large GA networks could bid up commission terms – concentrating market access among the largest agencies and pushing distribution costs upward.
That concern sits within a commission environment the Financial Services Commission (FSC) is already restructuring. From July 2026, the regulator extended its 1,200% rule to individual agents at GAs, capping first-year commissions at 12 times the monthly premium. From January 2027, new-contract commissions move to a four-year instalment structure, extending to seven years from 2029 – designed to shift agent incentives from acquisition toward retention.
Granting large GAs formal negotiating rights over commissions pulls in the opposite direction. Neither bill directly addresses that tension.
South Korea is not alone in grappling with intermediary commission reform. In July 2025, Hong Kong’s Insurance Authority (IA) issued a Practice Note capping first-year commission payments at no more than 70% of total commission for participating long-term policies, with the balance spread over at least five years – effective January 2026, according to law firm DLA Piper.
The contrast is pointed. Hong Kong moved to restrain upfront commission concentration. South Korea’s proposed legislation could formalize large Gas’ leverage to negotiate those commission terms in the opposite direction.
The bill introduced by Min Byung-deok of the Democratic Party of Korea would make the specialist company – not the individual planner – primarily liable for consumer harm caused during an insurance sale.
Both bills also require specialist companies to maintain minimum capital levels, subscribe to insurance or mutual aid arrangements, and appoint internal officers responsible for sales training, consumer protection, and compliance monitoring. For any GA considering conversion, the liability provision has direct implications for governance structures and errors and omissions exposure.
The GA association expressed support. An association official said: “The amendments reflect the changed environment of the insurance sales market and establish an institutional foundation for consumers to receive management and support after signing up for products,” adding, “We will strengthen education, internal controls, and consumer protection systems so that affiliated planners have professionalism and accountability.”
Read next: Voice phishing bill could reshape banks’ insurance decisions
A broadly similar framework was proposed in 2008 but did not become law, failing due to industry opposition and disagreement over the supervisory structure, according to Chosun Biz.
Two things have changed. The current bills carry bipartisan support. And the GA sector looks different – companies like Hanwha Life Financial Services have grown from sales intermediaries into sizable distribution businesses, and their stated ambition to become “insurance sales specialists” maps directly onto the designation these bills would create.
Whether that commercial trajectory is compatible with the consumer protection requirements the bills also impose is the question regulators will need to answer. The FSC and FSS have not issued public statements on either bill.
