South Korean financial authorities will raise the risk weighting applied to insurers’ mortgage loans with loan-to-value (LTV) ratios of 60% to 80% from 3.5% to 4% in late September under the Korean Insurance Capital Standard (K-ICS). The 0.5 percentage-point increase is expected to have a limited immediate effect on major insurers’ solvency ratios but reduce the capital efficiency and profitability of new mortgage lending over time. The measure accompanies, rather than reverses, an August 13 decision to raise the financial sector’s household-loan growth management target from 1.5% to 3.0%, creating an estimated 30 trillion won ($21.8 billion) in additional lending capacity. Samsung Fire & Marine Insurance and Hanwha Life have resumed some mortgage operations after suspensions, while other insurers are considering re-entry. The higher weighting may lead insurers to focus on mortgages with LTV ratios of 60% or less or charge more for higher-LTV loans; its insurer-only application also highlights authorities’ concern about the sector’s real-estate concentration.