Claims adjusters, once stigmatized for siding with insurers... Is fairness increasing?

[Asia Economy Reporter Oh Hyung-gil] There is a growing call to strengthen the role of loss adjusters to fairly assess damages and pay insurance claims when insurance accidents occur. With the passage of the 'Fair Economy 3 Acts' in the National Assembly, stricter regulations are also expected for loss adjusting subsidiaries, which have been criticized for being subordinate to insurance companies and leading efforts to reduce insurance payouts.

According to the insurance industry on the 30th, Jeon Jae-su, a member of the Democratic Party of Korea, proposed a partial amendment to the Insurance Business Act that allows loss adjusters to provide opinions on the damages and insurance payouts assessed by insurance companies during the insurance claim payment process.

Loss adjusters have typically been operated in a form directly employed or commissioned by insurance companies, but since 2018, insurance policyholders have also been able to directly appoint loss adjusters. Under current law, policyholders and others can appoint loss adjusters to assess damages and insurance payouts from the consumer side during the insurance claim process and express their opinions.

However, the regulations governing loss adjusters' duties do not include provisions for expressing opinions on damages and insurance payouts assessed by insurance companies. As a result, loss adjusters cannot present opinions on the amounts proposed by insurance companies during negotiations over insurance payouts. The amendment aims to expand the duties of loss adjusters by adding the act of exchanging opinions with insurance companies regarding damages and insurance payouts and explaining the content to policyholders and others.

However, there is an issue that the mediation and settlement roles of loss adjusters may potentially violate the Attorney-at-Law Act. In the previous 20th National Assembly, financial authorities pointed out that the act of exchanging opinions between loss adjusters and insurance companies could violate the Attorney-at-Law Act, causing the same amendment to fail.

An insurance industry official said, "When loss adjusters perform legal acts such as mediation and settlement of insurance payouts, the Bar Association responds with prosecution, and independent loss adjusters have faced legal penalties," adding, "There is a need to legally clarify the role of loss adjusters."

Meanwhile, it is expected that insurance companies' acts of withholding or reducing insurance payouts through subsidiary loss adjusters will be subject to legal regulations in the future.

Among the 'Fair Economy 3 Acts,' the amendment to the Monopoly Regulation and Fair Trade Act (Fair Trade Act) unifies the regulation target for private benefit extraction by controlling shareholders to 20% for both listed and unlisted companies, and significantly expands the scope of regulation to include subsidiaries in which these companies hold more than 50% of shares.

In the October National Assembly audit, Hong Sung-guk, a Democratic Party member, pointed out, "Once the Fair Economy 3 Acts are passed, all subsidiaries in which affiliates hold more than 50% of shares will be subject to regulations on internal transactions," and stressed the need to correct the practice of self-loss adjusting.

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