'20 Million KRW Coverage for Benign Tumor Diagnosis' Cancer Insurance, Financial Supervisory Service Restricts Sales

When insurance companies created products that set the diagnosis benefit for carcinoma in situ (such as thyroid cancer, borderline tumors, and carcinoma in situ) higher than that for common cancers, financial authorities stepped in to intervene. This is due to the high likelihood of future disputes between insurers and consumers.

According to the insurance industry on the 28th, the Financial Supervisory Service (FSS) expressed concerns about excessive competition regarding cancer insurance products sold by some non-life insurers that guarantee "up to 20 million KRW for carcinoma in situ diagnosis benefits." Typically, the diagnosis benefit for carcinoma in situ is about 20% of that for common cancers, but since early this month, non-life insurers such as Samsung Fire & Marine Insurance, Meritz Fire & Marine Insurance, and Lotte Insurance have set it approximately 20 times higher.

Previously, in 2022, when excessive competition over carcinoma in situ diagnosis benefits occurred among insurers, the FSS recommended that the subscription limits for carcinoma in situ diagnosis benefits be managed reasonably.

Accordingly, recently, insurance companies maintained the diagnosis benefit for common cancers such as stomach cancer at 1 million KRW, while setting the diagnosis benefit for relatively less common cancers like head and neck cancer at 100 million KRW, and the carcinoma in situ diagnosis benefit at 20% of that, 20 million KRW, for sale.

These products gained popularity because they offered coverage for carcinoma in situ, which has a higher incidence rate, at a lower price than existing cancer insurance. However, if excessive competition among insurers leads to higher loss ratios, it could negatively affect the companies' soundness. This may result in higher insurance payouts being passed on to consumers in the future.

The FSS stated that raising the diagnosis benefit for one type of cancer and setting 20% of that amount as the carcinoma in situ diagnosis benefit does not align with the intent of existing supervisory recommendations. Following the FSS's remarks, the insurers selling these products plan to soon suspend sales of this carcinoma in situ coverage insurance.