Why Are All Bills Related to Simplifying Actual Expense Claims Still Pending?
Among the 16 proposed amendments to the Insurance Business Act introduced this year, only one related to the 'digitization of claims for indemnity health insurance' has been approved, while the remaining 15 are still pending in the National Assembly.
According to the report titled "Status and Key Contents of Proposed Amendments to the Insurance Business Act in 2023" released by the Korea Insurance Research Institute on the 17th, a total of 16 amendments to the Insurance Business Act were proposed this year. Among these, only one bill related to simplifying indemnity claims, proposed as an alternative by the Chairman of the Political Affairs Committee, was approved at the plenary session on October 6 and promulgated on October 24 of the same month.
This bill mandates the establishment of a computerized system that automatically files indemnity insurance claims when indemnity insurance subscribers receive medical treatment at hospitals. Until now, to claim indemnity insurance benefits, subscribers had to obtain paper documents individually from hospitals, clinics, or pharmacies and submit them to insurance companies. The insurance companies would then input these documents into their systems before paying out the benefits to customers. The purpose of this bill is to digitize the entire process to reduce inefficient work.
After 14 years of being blocked due to opposition from the medical community, the bill was finally promulgated this year. The medical community opposed it on the grounds that insurers could use patients' medical data to pay or deny insurance claims and that medical information could be leaked. Above all, they strongly opposed the transmission of medical records and insurance claim information to the Health Insurance Review & Assessment Service, fearing that details of non-reimbursed medical treatments would be exposed.
Except for this bill, all 15 other proposed amendments remain pending in the National Assembly. The government-proposed amendments to the Insurance Business Act include provisions such as 'relaxation of the exclusive agent cross-recruitment system,' 'expansion of the scope of work of the Insurance Association,' 'improvement of penalty standards for violations of basic document compliance obligations,' and 'revision of fine provisions.' These include adding simple insurance-related complaint consultation and handling, as well as voluntary dispute resolution between insurance companies, to the scope of work of the Insurance Association. This is due to the difficulty of responding with the limited personnel of the Financial Supervisory Service.
There are also bills aimed at rationalizing sanctions on insurance companies and insurance agents. One proposal suggests changing the penalty for violations of basic document compliance obligations from the current 'up to 50% of annual premium income' to 'not exceeding the amount of damage incurred by the policyholder, insured, or beneficiary.' Another bill proposes revoking insurance agent qualifications in cases of insurance fraud. Currently, the Insurance Business Act prohibits individuals who have been criminally punished under the Insurance Business Act or the Financial Consumer Protection Act from becoming insurance agents. However, insurance fraud crimes are punished under the Special Act on the Prevention of Insurance Fraud or the Criminal Act, which were not considered disqualifications. This bill aims to include insurance fraud as a disqualification under the Insurance Business Act.
Other pending bills include those addressing improvements to the loss adjustment system, relaxation of special benefit regulations, and strengthening obligations to explain reductions or denials of insurance payments and medical advisory explanations.
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