Insurance Companies to Ease Underwriting Standards for Indemnity Insurance Enrollment

Submission of Improvement Plans by Insurance Companies Halted by Authorities

[Asia Economy Reporter Ki Ha-young] Major insurance companies have decided to ease the underwriting criteria for indemnity medical insurance.

According to the insurance industry on the 4th, Hanwha Life, Kyobo Life, Samsung Life, Samsung Fire & Marine Insurance, and others submitted a plan to the financial authorities at the end of last month to improve the underwriting guidelines for indemnity insurance based on the application form and reasonable grounds, with the intention to apply it by next month.

According to the improvement plan, these insurers will decide whether to approve contracts based on the severity of diseases confirmed through the disclosures (matters that applicants must inform the insurer) stated in the insurance application form or health examination results.

Under the current indemnity insurance application form, the matters that applicants must disclose include ▲ treatment experience within the last 3 months ▲ whether there is an opinion requiring additional examination within the last year ▲ diagnosis of major diseases or hospitalization/surgery treatment within the last 5 years.

Insurers will conduct underwriting based on these disclosures and health examination results, and will not reject applications solely on the grounds of having a history of treatment for common illnesses such as colds that frequently occur in daily life. They also plan to improve guidelines that reject applications solely because the applicant recently received other insurance benefits such as accident insurance. The fact of receiving insurance benefits will be used to verify the truthfulness of the applicant's disclosures or as an auxiliary means for separate examination.

In recent months, some major insurers have been operating strict underwriting conditions due to the enormous losses from indemnity insurance, effectively avoiding sales. Hanwha Life and others have operated guidelines rejecting applications solely because the applicant received treatment for simple lifestyle diseases at hospitals in the past two years. Samsung Fire & Marine Insurance does not accept indemnity insurance if the total insurance benefits received under diagnoses, surgeries, hospitalizations, disabilities, indemnity, etc., exceed 500,000 KRW across all insurers in the past two years.

The financial authorities judged these underwriting guidelines to be uncertain and excessive and requested improvements from the insurance industry last month.

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