Financial Consumer Protection and Sales Conduct
What this domain tests
The Financial Consumer Protection Act (금융소비자보호법, in force 25 September 2021) and its six conduct rules, applied to insurance solicitation: suitability, appropriateness, duty to explain, prohibition of unfair business conduct, prohibition of improper solicitation, and prohibition of false or exaggerated advertising.
Core rules
- 적합성 (suitability): the seller must collect income, assets, investment purpose and risk appetite and must refuse or re-recommend where the product does not fit.
- 적정성 (appropriateness): for unsolicited recommendations, the seller must warn that the product was not recommended by the firm and confirm the client still wishes to proceed.
- 설명의무: key contents - coverage, exclusions, premium, surrender value, penalties - must be explained in writing and acknowledged by signature; elderly clients (65+) require additional explanation and recording.
- 청약철회: generally 15 days from receipt of the policy documents, with longer statutory periods for specified product categories; 위법계약해지권 runs for five years from the contract and three months from discovery.
- Solicitors and agency staff must be registered, and commission structures are capped and monitored through 불완전판매비율.
Worked example
A 72-year-old customer is sold a variable annuity invested 100% in equity funds. The suitability assessment shows a fixed-income profile and a five-year horizon. The correct outcome is to record the mismatch, decline the sale or re-recommend a suitable product, and - if the customer insists - complete the recorded explanation. Selling without that record converts an ordinary complaint into a sanctions case with a compensation presumption.
Traps that cost marks
- Equating disclosure with explanation; the duty requires confirmed understanding, not a signature on a booklet alone.
- Ignoring the recording requirement for elderly customers.
- Assuming cooling-off applies universally - some corporate and short-duration contracts are excluded.