FSS Discloses Major Complaints and Dispute Cases for Q1 2025
Policyholder's Claim Rejected After Missing Electronic Payment Reminder
Insurance Benefits Determined by Disease Classification at Time of Enrollment
Coverage Criteria May Differ Depending on Insurance Period and Product Type
FSS Urges Careful Review of Policy Terms Before Purchasing Insurance
#Insurance company A canceled the insurance contract with policyholder B after sending a payment reminder (demand for payment) regarding unpaid premiums via KakaoTalk electronic document. B claimed that the cancellation was unfair because he had not seen the electronic payment reminder sent by the insurance company. However, the terms and conditions of the product stipulate that if the policyholder is late in paying premiums, the insurer may issue a payment reminder via electronic documents within a specified period. Therefore, the Financial Supervisory Service (FSS) determined that it was difficult to accept B's claim.
On June 25, the FSS disclosed major complaints and dispute cases for the first quarter of 2025. The FSS noted that, depending on the insurance product, insurers may send premium payment reminders via electronic documents (such as KakaoTalk) instead of registered mail. It also cautioned that if premiums remain unpaid after such reminders, the insurance contract may be canceled.
The FSS explained that if the insurance contract specifies the use of the Korean Standard Classification of Diseases (KCD) at the time of enrollment, the insured can still receive coverage even if the disease classification criteria change due to KCD revisions.
C, who purchased a cancer treatment rider in 2009, was recently diagnosed with urothelial papilloma and claimed insurance benefits for borderline tumors from his insurer. However, the insurer refused to pay, stating that under the current (8th) KCD, the disease is classified as a benign neoplasm (a non-cancerous tumor).
In response, C filed a complaint with the FSS, arguing that the eligibility for insurance benefits should be determined based on the KCD in effect at the time the contract was signed. The FSS found that according to the 5th KCD, which was in effect in 2009 when C enrolled, urothelial papilloma was classified as a borderline tumor. Since the rider defined borderline tumors in the KCD as eligible diseases and did not specify any separate provisions regarding the timing of assessment, the FSS concluded that the insurer is obligated to pay the insurance benefit based on the criteria at the time of enrollment, even if the disease is later classified as a benign neoplasm at the time of diagnosis.
However, the FSS advised that some insurance products determine coverage eligibility based on the KCD in effect at the time of diagnosis, so policyholders should carefully check the terms and conditions of their contracts.
The FSS also stated that for insurance products with separate coverage periods, such as annuity insurance, insurance benefits may not be paid depending on the coverage eligibility for each period.
D, who purchased a cancer diagnosis rider attached to an annuity insurance policy, was recently diagnosed with multiple myeloma and claimed a cancer diagnosis benefit from the insurer. However, the insurer did not pay the benefit, explaining that the product has different coverage criteria for each insurance period and that the cancer diagnosis occurred during a period not covered for cancer treatment costs. D then filed a complaint with the FSS.
According to the FSS, the terms and conditions of the annuity insurance divide the total insurance period into two periods (the first and second insurance periods) based on a certain age (55 years). The cancer diagnosis rider stipulates that the benefit is paid only if the first cancer diagnosis is confirmed during the first insurance period. In D's case, the cancer diagnosis occurred after age 55, which falls within the second insurance period where cancer diagnosis is not covered. Therefore, the FSS found it difficult to consider the insurer's refusal to pay as unfair.
An FSS official emphasized, "When purchasing insurance, please carefully check whether the disease you wish to be covered for is included in the coverage for each insurance period."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
