'Insurance Premium Discounts and Surcharges' 4th Generation Real Loss Insurance Launching July 1

[Asia Economy Reporter Oh Hyung-gil] The Financial Supervisory Service (FSS) announced on the 18th a preliminary notice of partial amendments to the Insurance Business Supervision Regulations, containing the revised contents ahead of the launch of the 4th generation indemnity health insurance in July.

The 4th generation indemnity insurance will apply discounts and surcharges where insurance premiums increase if there are many insurance claims. The FSS announced the indemnity insurance reform plan last December.

First, the financial authorities will separate covered and non-covered benefits into main contracts and special contracts, respectively, to establish a basis for statistical management such as loss ratios and to implement a premium differentiation system for non-covered benefits.

Next, a premium differentiation system linked to medical usage will be introduced for the non-covered portion.

However, the differentiation system will exclude "unavoidable medical users" who require continuous and sufficient treatment. This includes those eligible for special calculation under the National Health Insurance Act, such as cancer patients, heart disease patients, and patients with rare and intractable diseases, as well as those rated 1st or 2nd grade among long-term care recipients under the Long-Term Care Insurance Act for the Elderly.

The discounts and surcharges of the premium differentiation system for non-covered benefits are expected to be applied starting three years after the product launch.

Additionally, the self-pay rates will be raised from the current 10% and 20% for covered benefits and 20% for non-covered benefits to 20% for covered benefits and 30% for non-covered benefits.

The FSS has announced the regulatory changes to the Insurance Business Supervision Regulations until March 2nd, and after regulatory review by the Regulatory Reform Committee and approval by the Financial Services Commission, the 4th generation indemnity health insurance product is expected to be launched on July 1st.

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