"Individual and Group Indemnity Insurance Both Can Be Suspended... Resumption with Past Products Also OK"

Financial Services Commission and Financial Supervisory Service Improve Real Loss Insurance Suspension System
Insurance Companies Must Notify Consumers Directly from Now On

[Asia Economy Reporter Minwoo Lee] Starting next year, individuals and groups will be able to directly suspend duplicate subscriptions to indemnity health insurance regardless of whether they are individual or group policies. Additionally, when resuming a suspended individual indemnity insurance, they will be able to choose the previously subscribed product.

The Financial Services Commission and the Financial Supervisory Service announced on the 27th that after practical consultations with the insurance industry, revision of enforcement rules, and establishment of IT systems, these measures will be implemented from January next year. Earlier, in September, the authorities prepared the "Indemnity Insurance Duplicate Subscription Resolution Plan" to reduce the double premium burden on financial consumers who had duplicate subscriptions to individual and group indemnity insurance.

Indemnity insurance is a product that covers the medical expenses actually borne by consumers. Even if consumers have duplicate subscriptions to multiple indemnity insurance policies, compensation cannot exceed the treatment costs, raising concerns about double premium burdens. According to the Financial Services Commission, as of the end of September, there were about 1.5 million duplicate indemnity insurance subscribers, of which 1.44 million (96%) were duplicate subscribers related to group indemnity insurance (group-individual or group-group), and about 60,000 were duplicate individual indemnity insurance subscribers.

According to this plan, from the new year, duplicate subscribers of individual and group indemnity insurance will be able to apply for suspension not only for individual indemnity insurance but also for group indemnity insurance. They will also be able to receive refunds for premiums paid. Family members of employees insured under group indemnity insurance subscribed through their company will also be able to apply for suspension of group indemnity insurance. If a special contract between the insurer and the policyholder is concluded after January next year, premiums for the remaining period after the suspension date can be directly refunded to the employee.

Furthermore, the existing individual indemnity insurance suspension system will be improved. Previously, only products currently on sale at the time of resumption could be selected, but now the product the insured had subscribed to at the time of suspension can also be chosen. However, if the product was sold after April 2013 and the coverage change cycle (5 to 15 years) has passed, making re-subscription to a new product unavoidable, the subscriber must select a product currently on sale at the time of resumption.

In addition, when concluding group indemnity insurance contracts, insurers must directly inform not only the policyholders but also the insured employees about the duplicate subscription resolution system.

To check for duplicate indemnity insurance subscriptions, one can inquire on the Korea Credit Information Services’ "CreditForU" website. To suspend a policy, contact the insurer of the workplace or group insurance.

A Financial Supervisory Service official stated, "By utilizing this suspension system, the premium burden can be reduced by about 366,000 KRW per contract annually," and added, "We will actively inform consumers about this system in the future and continuously improve any insufficient aspects."