17 Insurance Business Act Bills Proposed This Year
16 Bills Pending Review
[Asia Economy Reporter Oh Hyung-gil] The passage of the bill to digitize claims for indemnity health insurance, aimed at improving the benefits for the 38 million indemnity health insurance subscribers, has been postponed until next year. Although various amendments to the Insurance Business Act were proposed this year, only one bill passed through the National Assembly, marking a legislative hiatus in the insurance sector.
According to the National Assembly's legislative information system on the 28th, a total of 17 amendments to the Insurance Business Act were proposed this year, with 16 still pending review. The only amendment approved by the plenary session of the National Assembly was one that relaxed the requirements for terminating insurance contracts via telecommunication means in response to the spread of COVID-19.
Two bills related to the digitization of indemnity insurance claims, which attracted high interest from the insurance industry, government, and consumer groups, were proposed this year (by Assemblymen Kim Byung-wook and Jung Cheong-rae). Including three bills proposed last year (by Jeon Jae-soo, Yoon Chang-hyun, and Ko Yong-jin), a total of five bills have been submitted to the National Assembly.
The basic content of the bills centers on allowing indemnity insurance policyholders to request medical institutions to electronically transmit documents necessary for insurance claims, such as medical expense statements, to insurance companies or third-party organizations.
This aims to resolve the inconvenience of having to obtain paper documents from hospitals and submit claims to insurance companies via fax, email, or mail. However, the bills failed to pass due to opposition from the medical community, which argued that imposing obligations on medical institutions, which are not parties to the insurance contract, is unfair and raised concerns about misuse and abuse of medical information.
On the 9th, at the plenary session held in the National Assembly, a revision to the Improper Solicitation and Graft Act was passed, which aims to alleviate difficulties in rural farming and fishing communities by temporarily raising the gift value limit under the Act from the current 100,000 won to 200,000 won during the Lunar New Year and Chuseok holidays. Photo by Yoon Dong-ju doso7@
The amendment proposed by the government to establish a basis for linking indemnity insurance policies with the National Health Insurance policy also failed to pass the National Assembly. The bill would have allowed the Financial Services Commission and the Ministry of Health and Welfare to consult and coordinate to jointly promote indemnity insurance and health insurance policies, and to conduct joint surveys on the operation status of indemnity and health insurance.
The National Assembly's Political Affairs Committee has suggested that the establishment of a public-private medical insurance linkage review committee and provisions for surveys should be directly stipulated in the law.
Legislation related to consumer protection was also delayed. A bill to regulate so-called 'self-loss adjustment,' where large insurance companies outsource claims adjustment to their subsidiaries, is still pending. Furthermore, an amendment proposing a general prohibition on self-loss adjustment was also introduced.
An amendment to allow electronic financial service providers to register as financial institution insurance agencies was not legislated either. If amended as proposed, electronic financial service providers would be subject to bancassurance regulations related to sales, raising concerns about whether the same bancassurance regulations should apply to electronic financial service provider insurance agencies.
Currently, the Financial Supervisory Service handles insurance complaints and dispute mediation, but delays due to staffing limitations have caused inconvenience. In response, an amendment was proposed to allow the Insurance Association to handle complaints and autonomous dispute mediation.
However, concerns were raised that if complaints are handled under the association's leadership, issues of fairness may arise, and the scope of complaints and disputes that can be handled by the private sector needs to be reviewed.
An insurance industry official said, "Both the private sector and the government have voiced a unified call for simplifying indemnity insurance claims, but it is regrettable that the National Assembly has stalled progress," adding, "We hope the amendment will pass next year, prioritizing the convenience of the public."
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