"Full Payout Rate After Medical Consultations at Life Insurers Drops by 10 Percentage Points in 5 Years"

"Samsung Fire & Marine Insurance Had the Most Medical Consultations Last Year"

The proportion of customers who received full insurance payouts after undergoing medical consultations arranged by insurance companies has dropped by about 10 percentage points over the past five years.

According to data analyzed by the office of Assemblyman Heo Young of the Democratic Party, a member of the National Assembly's Political Affairs Committee, and submitted by the Financial Supervisory Service on October 10, a total of 265,682 medical consultations were conducted by non-life insurance companies and 89,441 by life insurance companies over the past five and a half years, from 2020 through the first half of this year. The survey covered 21 life insurance companies and 16 non-life insurance companies.

Medical consultations refer to the process of seeking the opinion of a third-party medical specialist when there is a disagreement between the insurance company and the policyholder regarding the grounds for an insurance payout. According to Assemblyman Heo, there has been ongoing criticism in the field that insurance companies use the results of these consultations as grounds for reducing or denying insurance payouts.

The data shows that among customers who agreed to medical consultations at the 21 life insurance companies, the proportion who received full insurance payouts dropped from 38.2% in 2020 to 27.2% in the first half of this year, a decrease of 11 percentage points. The proportion of customers who received no payout rose from 19.9% to 30.7% over the same period, an increase of 10.8 percentage points.

The current standard terms and conditions stipulate that the customer and the insurance company must jointly select the consulting physician. However, according to Assemblyman Heo, 77% (69,044 cases) of medical consultations at life insurance companies involved consulting physicians selected from pools maintained by the insurance companies themselves.

Looking at the average consultation fees for life insurance companies in the first half of this year, specialists selected by the insurance companies themselves were paid an average of 273,460 won per case, while third-party specialists chosen by customers were paid 319,836 won per case. Consultations arranged by the insurance companies were less expensive. The insurance companies bear the full cost of the consultations.

In terms of the highest number of consultations conducted by the same physician last year, Samsung Life Insurance led life insurers with 182 cases, while Samsung Fire & Marine Insurance topped non-life insurers with 585 cases. Assemblyman Heo's office estimated that the maximum fees paid by the two companies to their most frequently used consulting physicians last year were 48.36 million won and 153.05 million won, respectively.

According to Assemblyman Heo, since the financial authorities established standard internal control guidelines for medical consultations in August 2021, no significant institutional improvements have been made. Even measures to strengthen fairness in the selection of consulting physicians, which were included in the "Insurance Reform Plan" jointly announced by related agencies in March, have been delayed in implementation. There is criticism that the practice of insurance companies not disclosing information about consulting physicians while using their opinions as grounds for insurance payouts needs to be addressed.

Assemblyman Heo stated, "In the insurance industry, there is a continuing practice where the identity of the consulting physician is not disclosed, and if customers do not consent to a medical consultation, the insurance payout process is indefinitely suspended. Before forcing customers to agree to consultations, it is more important to restore trust in the system."

He added, "We urge the financial authorities to enhance the fairness and transparency of the medical consultation process, and at the National Assembly level, we will pursue institutional improvements to protect the rights and interests of insurance consumers."