Financial Services Commission to Strengthen Pre-Verification of Basic Documents Such as Insurance Terms and Conditions

[Asia Economy Reporter Oh Hyung-gil] Financial authorities are strengthening prior verification of the preparation of basic documents such as insurance policy terms to reduce incomplete sales and insurance disputes by insurance companies.

On the 24th, the Financial Services Commission announced that it will revise the "Insurance Business Supervision Regulations" to include these measures.

The authorities will expand the scope and functions of the review by the Third Insurance New Product Development Consultative Body.

The Third Insurance New Product Development Consultative Body, operated by the Insurance Association, reviews the appropriateness of claim documents and payment reasons when developing third insurance products such as accident, illness, and nursing care insurance. There have been continuous criticisms that prior verification has not been sufficiently conducted due to the limited scope and functions of the review.

Accordingly, the Financial Services Commission decided to expand the current third insurance products, which cover hospitalization and outpatient care, to products with new coverage contents or payment restrictions conditions that are not sold by the relevant insurer or other insurers.

Furthermore, it was mandated to verify that the payment restriction conditions are medically valid and clearly set so that consumers can understand them.

In addition, when preparing basic documents for insurance products such as insurance policy terms, business method manuals, and methods for calculating premiums and reserve liabilities, legal and medical verification will be mandatory.

For third insurance products applying new coverage contents or payment restriction conditions, prior legal expert review will be required to check for legal violations or potential disputes, and prior review by medical professionals will be mandatory.

The amendment to the Insurance Business Supervision Regulations will take effect from September 1.

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