Insurance companies in South Korea will be allowed to have healthcare or medical service entities as subsidiaries under revised guidelines, financial authorities said Thursday.

According to Financial Services Commission (FSC) and Financial Supervisory Service (FSS), insurance companies will be allowed to own 15 percent or more ownership in healthcare companies to incorporate them as subsidiaries from Friday upon regulatory approval. Healthcare subsidiaries will only be allowed to deal with policyholders and insurants for now while the financial authority reviews whether to allow businesses that target a broader audience.

The revised guideline on insurance companies come as part of deregulation measures to boost related service and expand health promotion insurance products.

From Sunday, insurance companies will also be allowed to provide policyholders healthcare devices that have been statistically verified to reduce insurance risk during insurance subscription process. For example, they can give policyholders glucometers that measure blood sugar level or oral bacteria measuring device to consumers that sign up for diabetes or dental insurance.

The financial authority, however, set a limit on the price of healthcare devices that can be provided to policyholders to prevent excessive sales competition. Insurers will be allowed to provide devices priced 100,000 won ($84) or under or 50 percent or lower than first-year additional insurance fees.

The financial authority, meanwhile, said that it will extend the period for statistical collection of data related to reducing insurance risk from current maximum of 5 years to 15 years.

By Lee Eun-joo

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