First American Corp., the second-largest provider of title insurance in the U.S., is entering the Korean market to tap growing demand for insurance for real estate and other assets.
Korea's Financial Supervisory Commission, which decides rules for the industry, said it approved a proposal allowing Santa Ana-based First American to set up a Korean branch.
First American's stock closed Friday at $18.94, off 48 cents a share, on the New York Stock Exchange.
Title insurance protects lenders against challenges to title claims and property-related losses, helping companies hedge unexpected losses from trading securities backed by assets or mortgages.
"The niche for title insurance will grow with the advent of mortgage-backed and asset-backed securities in Korea," said Hwang Sung Kwan, an official at the Financial Supervisory Service's insurance supervision bureau, which enforces regulations and monitors the operations of financial companies.
Korean companies sold a total of $37.7 billion of asset-backed securities last year. Regulators first approved the issuance of such securities the previous year.
The Financial Supervisory Commission also permitted Cardif Societe Vie, a subsidiary of France's Cardif SA, to set up a Korean branch. Cardif, a unit of BNP Paribas SA, France's largest bank, signed an agreement Thursday with Shinhan Bank, Korea's third-most-profitable lender, to set up a joint venture in Korea.