"Did Insurance Companies Pay Claims Within 3 Days? Strengthening Disclosure Obligations"

Insurance Retention Rates Also Disclosed by Coverage Period

[Asia Economy Reporter Minwoo Lee] Going forward, insurance companies will be required to periodically disclose the 'retention rate,' which shows the status of insurance contract maintenance over five years, and whether insurance payments were made within three days.

On the 14th, the Financial Supervisory Service (FSS) announced that it will revise the Insurance Business Supervision Rules based on these contents.

Accordingly, a new disclosure called 'prompt payment' will be added to verify whether insurance payments were made quickly. The ratio of payments made within three days after claim receipt and the average processing time must be reported semiannually. According to the standard life insurance policy, insurers must pay insurance benefits within three business days from the date of receiving the relevant documents (within 10 business days if investigation or verification is required).

Additionally, the names of related disclosures will be changed to be easier to understand. The dissatisfaction rate with insurance payments (number of contracts canceled after claim / number of claims) will be renamed as 'post-claim cancellation rate,' and the delayed payment rate (number of cases exceeding the payment deadline / number of claims) will be renamed as 'additional processing payment rate.'

Along with this, a new disclosure for the 'retention rate,' an indicator of long-term complete sales of insurance, will be established. The retention rate refers to the proportion of initially concluded insurance contracts that remain in force after a certain period.

Insurance companies will be required to disclose retention rates by retention period, product type, and sales channel every half year. This will report the retention rates for specific periods such as 1 year (13th period), 2 years (25th period), 3 years (37th period), and 5 years (61st period). Furthermore, life insurers and non-life insurers must disclose retention rates by product and by sales channel (agents, individual agencies, bancassurance, etc.) separately.

The FSS plans to conduct a prior notice period until the 27th of next month to gather diverse opinions from external stakeholders for the revision of the rules. The revised disclosure standards will then be applied starting with data from the first half of this year (September this year).

An FSS official stated, "The insurance industry will strive for complete sales, and consumers will be able to accurately understand and easily utilize the disclosed information. We will prepare to strengthen related disclosures without any setbacks."

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