South Korea’s 13-year-old rule limiting insurers’ investments in subsidiaries to 3% of total assets is restricting domestic insurers’ ability to compete for large acquisitions, while overseas financial company investments are exempt. The resulting reverse discrimination has helped foreign private equity funds win assets and forced local insurers to use consortia, project funds (PEFs) and acquisition financing. Hillhouse Capital offered 1.1 trillion won for Lotte Non-Life Insurance, while Hanwha Life and Heungkuk Life Insurance faced investment ceilings of roughly 800 billion won and 400 billion won, respectively. Yebyeol Non-Life Insurance went to OK Financial Group, and KDB Life Insurance selected Korea Investment Holdings as preferred bidder; Samsung Life Insurance, Kyobo Life Insurance and Heungkuk Fire & Marine were reportedly outbid. Kyobo Life’s cap is about 400 billion won, while Hanwha Life’s rose to 1.32 trillion won after consolidating Hanwha Life Financial Services, yet it still formed a consortium for the approximately 1 trillion won Acuon Capital acquisition. Overseas investments by Samsung Fire & Marine and DB Insurance are exempt from the cap, reflecting a policy intended to promote international expansion but criticized for constraining domestic investment. The source compares South Korea’s pre-approval approach with the United States, Japan, the U.K. and Germany, where different or less restrictive regimes apply. Insurers are also facing a sharp rise in surrender value reserves, which reached 44.0066 trillion won at the end of the first half, up 25.6% from year-end, reducing retained earnings and dividend capacity. The Financial Services Commission and Financial Supervisory Service gathered industry feedback on reserve reform from the 24th to the 28th of last month. Separately, the FSS reviewed sales practices and internal controls at five major life insurers and six non-life insurers, citing continuing concerns despite the 1200% commission rule and related reforms. The industry is calling for a shift from pre-approval asset management controls to post-hoc oversight as managed assets exceed 1,000 trillion won but returns remain in the 3% range.