Samsung Life Disciplinary Hearing... Final Decision on Cancer Insurance Nursing Hospital Admission Fees

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] The financial industry is closely watching whether the Financial Supervisory Service's (FSS) disciplinary committee will bring closure to the controversy over non-payment of cancer insurance nursing hospital inpatient fees related to Samsung Life Insurance's comprehensive inspection.

On the 26th, the FSS plans to review the disciplinary measures against Samsung Life Insurance at the '28th Disciplinary Committee Meeting' (hereafter referred to as the Disciplinary Committee). It is known that the FSS has already pre-notified Samsung Life Insurance of a severe disciplinary action of 'institutional warning.'

Although the main agenda is confidential in advance, one of the key issues in this disciplinary committee includes the matter of non-payment of nursing hospital inpatient fees.

Last year, through a comprehensive inspection of Samsung Life Insurance, the FSS uncovered cases where inpatient fees for nursing hospitals for cancer patients were not paid.

Samsung Life Insurance argued that nursing hospital stays for cancer patients were difficult to consider as direct cancer treatment and thus withheld insurance payments. In response, cancer patients claimed that receiving chemotherapy after nursing hospital admission also constitutes direct treatment.

Subsequently, the FSS recommended payment of insurance benefits, stating that three types of cases?hospitalization of terminal cancer patients, hospitalization during chemotherapy treatment, and hospitalization immediately after malignant tumor resection?can be regarded as direct treatment acts.

Insurance companies then decided on whether to pay insurance benefits through re-examinations. However, Samsung Life Insurance did not accept all of the recommendations.

According to Go Yong-jin, a member of the Democratic Party of Korea, Samsung Life Insurance accepted 217 cases, which is 39.4% of the 551 cases recommended by the FSS. Of the remaining cases, 263 (47.7%) were partially accepted, and 71 cases (12.9%) were rejected.

Amid this situation, last month the Supreme Court dismissed a cancer insurance claim lawsuit without oral argument, siding with Samsung Life Insurance, which further intensified the controversy.

However, financial authorities view the Supreme Court's judgment as separate from the disciplinary committee's decision. FSS Governor Yoon Seok-heon previously drew a line at the National Assembly's Political Affairs Committee, stating, "I do not think the Supreme Court ruling will have an impact."

A financial authority explained, "The Supreme Court ruling is a conclusion on a single case. In the disciplinary committee, the members comprehensively review the recommendations made by the FSS."

[Image source=Yonhap News]

Another reason why this disciplinary committee is attracting attention is the severity of the disciplinary action.

If the FSS confirms the severe disciplinary action against Samsung Life Insurance as previously announced, repercussions are expected. Earlier, the FSS had pre-notified Samsung Life Insurance of a disciplinary action at the level of 'institutional warning.'

If a disciplinary action of institutional warning or higher is imposed, Samsung Life Insurance will be unable to enter new businesses requiring financial authorities' approval or permits for one year. Approval for major shareholder changes will also be restricted. This could make it difficult for Samsung Life Insurance to proceed with new business ventures such as healthcare and MyData. Additionally, its subsidiary Samsung Card could face suspension of its MyData business.

The insurance industry believes that unless there is a major surprise, the severity of the disciplinary action is unlikely to change. An insurance industry official said, "In previous disciplinary committees for insurers, severe disciplinary actions have been confirmed as is," adding, "We cannot help but consider the recent trend emphasizing consumer protection."