Repeated Disputes Over Traffic and Medical Accidents... Will an Independent Insurance Review Agency Emerge?

The Democratic Party Proposes Establishment of Traffic Accident Dispute Mediation Committee
Frequent Waivers of Disputes... Eliminating Unnecessary Social Costs
"Create an Independent Medical Advisory Body to Improve the Advisory System"

[Asia Economy Reporter Oh Hyung-gil] In October last year, Kim Se-jin (41, pseudonym), who was driving a passenger car near Suwon City, Gyeonggi Province, was involved in a traffic accident with a vehicle coming from the opposite lane. However, he experienced an absurd situation during the accident handling process. When the opposing driver, who crossed the center line, claimed that Kim could have avoided the collision but deliberately hit his vehicle, the opposing party's insurance company refused compensation. Although Kim insisted that the accident occurred because the other vehicle suddenly swerved out, the insurance company repeatedly responded that they could not provide compensation.

Eventually, Kim filed for dispute mediation and recently received a conclusion that he was not responsible as the accident was caused solely by the other driver's fault. Kim said, "If I had not filed the dispute with the help of an acquaintance, I might not have received the insurance money as claimed by the other party and the insurance company," adding, "Although it was regrettable that time and costs were spent resolving the dispute, I am relieved to have received a proper decision."

As disputes surrounding automobile insurance and insurance companies' medical consultations continue, there are calls to establish an independent organization or committee to objectively resolve these issues.

This is because insurance consumers often lack the ability to respond, and even if they do, it requires significant time and cost, leading to social inefficiency. Therefore, an independent dispute resolution body is needed to effectively address consumer complaints while ensuring transparency.

According to the National Assembly and the insurance industry on the 10th, Park Jae-ho, a member of the Democratic Party of Korea, recently proposed the "Automobile Damage Compensation Guarantee Act Amendment," which aims to establish an Automobile Insurance Dispute Mediation Committee. The purpose of the bill is to fairly and promptly resolve disputes related to insurance payments from automobile accidents and eliminate unnecessary social costs.

According to Representative Park, when a traffic accident occurs, due to information asymmetry between the insurance company and the insured, many insured individuals or victims have no choice but to accept the insurance payments offered by the insurance company.

In cases where they want to contest, they must file a lawsuit to seek relief, and insured individuals without economic or time resources often give up exercising their rights.

Park's office explained, "Currently, the Financial Supervisory Service's Dispute Mediation Committee handles all insurance disputes, but to eliminate unnecessary social costs, we propose establishing an Automobile Insurance Dispute Mediation Committee under the Ministry of Land, Infrastructure and Transport."

On the morning of the 7th, a reporter from a media outlet entering the National Assembly tested positive for COVID-19, putting the National Assembly on high alert once again. This is the third confirmed case since the first resident staff member tested positive at the end of last month. The National Assembly plans to partially close the main building and the Communication Office in the afternoon for disinfection. The photo shows the National Assembly on that day. Photo by Kim Hyun-min kimhyun81@

Proposal to Prevent Abuse of Medical Consultation System... Establishment of Independent Medical Review Organization

There have also been calls to establish an independent review organization related to insurance companies' medical consultations.

This is because there are ongoing criticisms that insurance companies abuse the medical consultation system to unjustly deny or reduce insurance payments. Some argue that the selection of external medical consultation institutions is centered around insurance companies, leading to unfairness.

In fact, KB Insurance and NongHyup Property & Casualty Insurance recently received demands for system improvement from the Financial Supervisory Service, citing that "third-party medical consultations are extremely limited and consultation requests are concentrated on a few doctors."

The Korea Insurance Research Institute argued that establishing an integrated independent medical review organization for the insurance industry could address fairness issues and reduce costs related to the medical consultation process. They explained that, similar to the U.S. case where federal or state governments establish Independent Review Organizations (IROs) to appoint medical consultants, creating an independent body could resolve disputes.

The industry holds a cautious stance. They emphasize that decisions should consider the social costs of establishing an independent organization and express concerns that procedures might become more complicated.

An insurance industry official said, "Can we guarantee objectivity just because a committee is established under the Ministry of Land, Infrastructure and Transport?" and added, "If multiple committees are established, the resolution process will only become more complicated and consumer distrust in insurance will increase."