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The Financial Services Agency is set to ban insurance agencies from making subcontractors sell insurance products, deeming that subcontractors often fail to sufficiently explain products to customers and try to sell them excessive coverage to earn more commissions, sources said Friday.

A draft of amended guidelines for supervising insurers will be released next week and be formally adopted after the FSA invites public comments, they said.

The agency is also expected to order all life and nonlife insurers to report on their insurance agencies and measures for improving their sales manners. It will be the first such order the FSA has issued to insurers since 2007.

The subcontractors are not employed by the insurance agencies but receive payments from them based on how much they sell.

Although the insurance business law bans such sales by subcontractors, the FSA has not cracked down on them as long as the subcontractors have adhered to certain practices, such as receiving periodic training at insurance agencies.

But the FSA found many insurance agencies do not give enough training and insurers are often unaware that their products are sold by poorly trained subcontractors, leading it to seek a total ban on sales by subcontractors, according to the sources.

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