Lawsuit Over Unpaid Immediate Annuities by Life Insurance Companies... Subscribers Win Again

Mirae Asset Life Followed by Dongyang Life's Defeat
Financial Consumers Union: "Life Insurers Must Pay, Though Late"

[Asia Economy Reporter Ki Ha-young] Life insurance companies are consecutively losing lawsuits demanding the return of unpaid immediate annuity payments. Following Mirae Asset Life Insurance, Dongyang Life Insurance also lost in an immediate annuity lawsuit.

On the 19th, according to the Financial Consumers Federation, the Seoul Central District Court Civil Division 24 (Judge Myung Jae-kwon) ruled in favor of 12 Dongyang Life Insurance immediate annuity subscribers who filed a lawsuit against the insurer demanding the return of unpaid funds, ordering the insurer to pay the unpaid insurance money to the plaintiffs.

This ruling is the second favorable verdict for plaintiffs in the joint immediate annuity lawsuit against six life insurance companies including Samsung Life Insurance. So far, plaintiffs have won verdicts against Mirae Asset Life Insurance and Dongyang Life Insurance, with rulings against Samsung, Kyobo, Hanwha, and KB Life Insurance still pending. Previously, Mirae Asset Life Insurance appealed the first trial verdict.

In 2018, the Financial Consumers Federation organized a joint lawsuit gathering immediate annuity subscribers, claiming that life insurers arbitrarily underpaid insurance benefits to subscribers. The federation and subscribers argued that insurers deducted maturity insurance payment funds without clearly stating this in the policy terms or properly informing subscribers, and calculated monthly annuity amounts accordingly, demanding that insurers return the deducted amounts. The Financial Supervisory Service estimated in 2018 that the scale of unpaid immediate annuity disputes involved 160,000 people and amounted to 800 billion KRW.

The federation urged, "Although late, we hope insurers voluntarily pay the unpaid annuities now," and added, "To prevent tricks such as limiting compensation to a small number of lawsuit participants or expiration of the statute of limitations, a class action system must be introduced as soon as possible."