Increase in Confirmed Cases... China's 'Corona Insurance' Turns into a Burden

China Sees Surge in 'Corona Insurance' Disputes... Leading to Litigation Battles

[Image source=Reuters Yonhap News]

[Asia Economy Beijing=Special Correspondent Kim Hyunjung] The "corona insurance," which saw a surge in subscriptions due to fears of COVID-19 infection in China, is turning into a burden. Despite a sharp increase in confirmed cases after the transition to the with-COVID-19 system, insurance companies are refusing to pay claims by imposing stringent conditions.

On the 15th, local media China Economic Net reported, "Many people who tested positive for COVID-19 are not receiving insurance payouts," adding, "Disputes are increasing as people resort to lawsuits and mediation before receiving payments."

The report introduced the case of Pupu (a pseudonym), who recently tested positive for COVID-19 after subscribing to Pacific Insurance's 'COVID-19 Quarantine Allowance Insurance' in March. The insurance, subscribed to by this woman residing in Beijing, guaranteed 20,000 yuan (approximately 3.75 million KRW) for a COVID-19 diagnosis, 6,000 yuan for hospitalization, and 2,800 yuan for cohort quarantine. However, when she called the insurer for inquiries, the company demanded that original documents such as the nucleic acid test certificate issued by the hospital, confirmation of mild, severe, or asymptomatic infection, chest X-rays, and blood test results be sent by 'mail.' The individual told China Economic Net, "The long waiting time at the hospital is a problem, and symptoms changed during that time," adding, "I called the insurer, but now it's difficult to get through."

Xiaolin (a pseudonym), residing in Guangdong, had a similar experience. The media reported that she subscribed to a similar insurance early this year and recently tested positive for COVID-19, submitting nucleic acid test certificates, antigen positive proof, and a doctor's diagnosis. However, the insurer refused to pay, stating, "It does not meet the new confirmation criteria announced by the National Health Commission." Xiaolin criticized, "They delay by saying additional tests are needed and try to avoid compensation by citing lack of evidence if symptoms improve."

On the Chinese consumer platform FlackCat, over 2,000 complaints related to 'COVID-19 insurance' have been posted recently, with a significant number appearing this month. According to data released by the China Banking and Insurance Regulatory Commission, complaints related to COVID-19 quarantine insurance disputes in the second quarter of this year totaled 2,434, accounting for 24.22% of all complaints against property insurers.

On social networking services (SNS), hundreds of comments were posted on a post in April by someone who tested positive for COVID-19 and only recently received insurance payments, asking for advice. The individual explained, "I filed a lawsuit and received money after negotiating with the insurer during the process." Recently, rumors have spread that "life insurance enrollment is denied if you test positive," causing anxiety among subscribers. The media quoted an insurance company official explaining, "There may be an impact in severe cases."

Insurance companies are changing the payout conditions for newly launched products. One insurer has removed coverage for 'asymptomatic COVID-19 infections,' and some public transportation insurance products are also being released without COVID-19-related coverage, the media reported. Recently, the Beijing Banking and Insurance Regulatory Bureau requested each insurer to develop universally priced and appropriate compensation products related to COVID-19 and to cover severe, critical, and death risks.