Insurance in North Korea

North Korea's Insurance Law was adopted in 1995 and amended in 1999, 2002, 2005, 2008 and 2015. The Social Insurance and Social Security Law was adopted in 2021. The Insurance Law governs contract-based insurance and does not govern state social insurance. Social insurance applies nationwide to institutions, companies, organizations and citizens, except for children's and childcare institutions. The state budget and institutional or company funds provide its main financing. Employees and workers contribute 1% of monthly wages. Farmers contribute 1% at the final distribution of agricultural output. Payments are made monthly or at the final distribution, depending on the contributor. Late payment carries a surcharge of 1% per day. Social insurance benefits include temporary support, maternity and post-birth support, funeral support and rest or recuperation benefits. A regular temporary allowance is generally 30% to 50% of living expenses. The rate is 50% for a workplace accident or illness arising from work and 100% for certain privileged groups. Temporary support normally lasts for a maximum of six months within twelve months. An extension of up to six additional months requires approval. Medical certificates, recuperation or rest authorization and other confirmations support the claim; missing evidence can prevent payment. Social security covers old age, permanent loss of work capacity, disability and lack of necessary support. The related institution, company or organization submits an application to the 중앙로동행정지도기관, the relevant People's Committee or an agricultural body. A decision should be made within a maximum of seven days. Approved applicants receive registration and a social-benefit certificate. Provincial, directly governed city and local People's Committees implement the system regionally. No separate special rule for another administrative level is documented. Contract-based insurance is provided by an insurance company approved by the 중앙보험지도기관, the central insurance guidance authority. The system includes personal and property insurance and can be voluntary or compulsory. The Cabinet may introduce new insurance types or compulsory objects. The legal framework provides for contracts involving institutions, companies, organizations, citizens, foreign institutions, foreign-invested enterprises, foreigners and overseas Koreans. Listed local insurance types include life insurance, accident insurance, child insurance, passenger insurance, fire insurance, marine insurance, agricultural insurance, technical insurance, motor insurance, credit insurance, liability insurance, guarantee insurance and reinsurance. The 중앙보험지도기관 approves insurance companies, products, tariffs, policies, reinsurance arrangements and agents or brokers. KNIC, also called Korean National Insurance Company or Korea Foreign Insurance Company, is a documented state insurance institution based in Pyongyang. A policyholder submits a written application and truthful risk information. The contract must be written. Acceptance and issuance of the insurance policy complete the contract. The policy identifies the parties, insured subject, value, insured amount, covered and excluded risks, term, premium, payment method and benefit procedure. Coverage takes effect after the premium is paid. If an installment is late, coverage can be suspended and may be restored after payment of the arrears and related late costs. The policyholder pays premiums, reports damage without delay and takes reasonable steps to reduce the loss. A personal-injury claim requires a benefit application and proof of death or incapacity. A property claim may require repair, replacement or restoration evidence. Liability insurance generally pays the injured third party directly and can include arbitration or court costs. The parties may change the contract by agreement within one month. Before an insured event, they may also end the contract fully or partly by agreement, with a proportional premium refund. A property policyholder must report a material change in risk; the insurer may adjust the tariff or terminate the contract. A property contract renews automatically for one year unless notice is given at least three months before expiry. An insurance company requires approval within a maximum of 60 days for establishment, followed by business and tax registration periods of 30 and 20 days respectively. It must maintain minimum financial capacity and insurance reserves and submit annual documents within three months. Publicly reliable standard household tariffs and premium schedules are not available. Contract-based insurance therefore appears most relevant in institutions, companies, transport, agriculture, foreign trade and special economic zones. Formal private, personal and property insurance exists, but reliable evidence about household accessibility, premium levels, claim rates and local branch practice is limited. A transparent, plural private insurance market comparable to systems in many other countries has not been established by the available evidence. International restrictions further affect the system. United Nations sanctions designate KNIC as a DPRK financial or insurance entity. Member States may not provide public or private support, including export credits, guarantees or insurance for trade with the DPRK, subject to narrow exceptions for diplomatic or consular operations and UN-coordinated humanitarian assistance. International reinsurance and cross-border claims handling are therefore strongly constrained.