'Unfriendly Medical Advisory System' AIG Sonbo Receives Improvement Measures

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[Asia Economy Reporter Oh Hyung-gil] AIG Insurance received improvement orders from financial authorities due to inadequate guidance related to the medical advisory system and loss adjusters.

According to the insurance industry on the 5th, it was revealed that AIG Insurance received 60% of third-party medical consultations from its own medical advisory specialists between 2017 and March of last year.

Insurance companies seek medical opinions through consultants for diagnoses of diseases or disabilities. For impartial opinions, with the consent of the insurance policyholder, consultations can be obtained from third-party medical institutions and used in insurance claim reviews. However, in such cases, the insurance company must explain the medical advisory results to the policyholder and obtain the beneficiary’s consent. Additionally, the insurance industry generally excludes specialists who have conducted medical consultations within the past year when requesting third-party medical consultations.

However, it was confirmed that AIG Insurance provided insufficient guidance regarding the ability to review or receive copies of medical advisory response documents and the possibility of third-party medical consultations. In particular, medical consultations were concentrated with specific consultants. 40.3% of all medical consultations were conducted by 18 specialists.

Also, although AIG Insurance provided information on the appointment of independent loss adjusters through its website and other channels, some notices were unclear about the rights to appoint independent loss adjusters and related appointment costs, raising concerns that policyholders might misunderstand that they bear the appointment costs.

AIG Insurance operates insurance claim review standards but was found not to have promptly reflected the latest precedents or dispute mediation cases.

The financial authorities also uncovered that AIG Insurance underpaid insurance claims unfairly due to violations of pre-contract disclosure obligations. AIG Insurance failed to pay 16 million KRW in insurance claims for five insurance contracts, contrary to the insurance terms and conditions.

For two insurance cases, 15 million KRW was not paid due to violations of pre-contract disclosure obligations unrelated to the insurance accident. Additionally, although the policyholder underwent radiofrequency ablation for thyroid nodules and benign thyroid neoplasms and claimed insurance, AIG Insurance did not pay 1 million KRW for the surgery insurance benefit. The financial authorities issued a notice requiring voluntary correction regarding the unpaid insurance claims.

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