SEOUL-- South Korea's top financial regulator said Monday it will cut the interest on overdue debt and the premiums of indemnity medical insurance in line with the government's policy of easing the financial burdens for low-income earners.

Choi Jong-ku, chairman of the Financial Services Commission (FSC), also said the FSC will actively encourage insurance firms to return unclaimed insurance benefits worth 7.6 trillion won (US$6.71 billion) to customers.

Interest on overdue debt will be lowered by the end of this year after starting to revamp it this week, Choi told reporters.

Premiums of indemnity medical insurance, or reimbursement-backed private medical insurance, will be cut during the first half of next year, Choi said.

Insurers have come under scrutiny as they sharply increased premiums.

According to a parliamentary audit report by Rep. Sim Sang-jeong, a progressive lawmaker, Heungkuk Life Insurance hiked premiums for female holders of indemnity medical insurance by 47.9 percent last year.

As for male holders, premiums of Heungkuk's indemnity medical insurance rose by 35 percent last year.

Choi said the FSC will let insurance firms reduce premiums of indemnity medical insurance after analyzing their insurance data with health authorities.

To raise investor confidence, Choi said the FSC will make efforts for firms to adopt stewardship codes aimed at encouraging engagement between companies and investors.

Investors can check whether companies make efforts to improve their governance by introducing stewardship codes, Choi said.

Source: Yonhap News Agency