Over 20,000 Dispute Resolution Applications Filed with Non-Life Insurance Companies... 'Record High'

[Asia Economy Reporter Oh Hyung-gil] Office worker Lee Jung-guk (45, pseudonym) was involved in a rear-end collision during driving over the Lunar New Year holiday. Lee had a major dispute with the opposing party’s insurance adjuster over fault determination. Lee’s vehicle was hit from behind while making a left turn at an intersection, but the opposing insurer notified him that his fault ratio was 10% due to a breach of duty of care. Upon advice from acquaintances that disputes with insurers could be resolved through dispute mediation, Lee applied for mediation through an administrative agent. Ultimately, Lee was able to obtain a conclusion that the accident was caused solely by the fault of the other vehicle’s driver.

Last year, the number of dispute mediation applications against non-life insurance companies reached an all-time high. This is interpreted as not only an increase in consumers opposing the insurers’ unilateral decisions but also a rise in consumers utilizing the dispute mediation system as it becomes more established.

According to the insurance industry on the 7th, the number of dispute mediation applications against non-life insurers last year was 19,466 cases (excluding duplicates and repeats), a 12% increase from 17,260 cases the previous year. The number of applications has been increasing annually, from 13,961 cases in 2016 to 16,191 cases in 2017.

By insurer, Samsung Fire & Marine Insurance had the highest number with 3,931 cases, followed by Hyundai Marine & Fire Insurance with 3,257 cases, DB Insurance with 2,868 cases, KB Insurance with 2,240 cases, and Meritz Fire & Marine Insurance with 1,775 cases. Large insurers with many policyholders also ranked high in the number of applications.

On the other hand, dispute mediation applications against life insurance companies showed a declining trend. Last year, the number of applications against life insurers was 8,260 cases, down 16% from 9,849 cases the previous year. This is attributed to the absence of prominently controversial insurance issues last year, unlike in the past with immediate annuities or cancer insurance non-payments.

Dispute mediation applications are procedures where the Financial Supervisory Service (FSS) facilitates agreements between parties regarding disputes raised by consumers against financial companies. Consumers submit a dispute mediation application form containing the cause of the dispute and evidence to the FSS.

The Financial Dispute Mediation Committee only mediates cases requiring new mediation decisions, such as those lacking existing precedents or clear contractual provisions, or those needing ambiguous interpretation or legal judgment.

The high number of dispute mediation applications against non-life insurers stems from the characteristics of non-life insurance. Since the policyholder and the beneficiary are usually the same person or family in life insurance, disputes are rare. In contrast, in non-life insurance such as automobile insurance, the policyholder and the beneficiary differ, leading to conflicts over whether the insurance payout is appropriate.

In particular, recently, there has been an increase in dispute mediation applications contesting fault ratios in traffic accidents. With the growing installation of black boxes in vehicles and the abundance of related information online to assess fault ratios in traffic accidents, many consumers dissatisfied with their assigned fault ratio seek to clarify the matter through dispute mediation.

However, cases where disputes escalate to litigation are decreasing. Last year, the number of lawsuits filed by or against non-life insurers was 140, down from 192 the previous year.

An industry official explained, "The fact that consumers raise many complaints about insurers’ decisions while increasingly filing dispute mediation applications instead of lawsuits indicates that the related system is functioning well."

This content was produced with the assistance of AI translation services.