SEOUL — In a decisive attempt to curb soft insurance fraud and eliminate "malingering patients" (often referred to as nairong patients), the South Korean government will implement the so-called "8-Week Rule" starting next month. By subjecting extended treatment for minor injuries to independent medical reviews, authorities and insurers expect a substantial reduction in unnecessary insurance payouts and an improvement in auto insurance loss ratios.

According to financial industry sources on August 6, the Ministry of Land, Infrastructure and Transport (MOLIT) announced that the revision to the Enforcement Decree of the Guarantee of Automobile Accident Compensation Act passed the Cabinet meeting on August 4. The revised decree will officially come into effect on September 10, 2026.

Core Mechanism: Independent Medical Review for Extended Care

At the heart of the reform is the introduction of the 8-Week Rule. Under this system, patients classified with minor injuries (Injury Grades 12 to 14—including simple sprains of the spine or joints and basic contusions) who wish to receive medical treatment for longer than 8 weeks post-accident must undergo a clinical necessity review conducted by professional medical evaluators from the Korea Car Insurance Claims Assessment Service (KCIAS).

To receive additional treatment, patients must submit diagnostic certificates and medical records. Insurance companies or mutual aid associations will then formally request an evaluation from KCIAS, which will communicate the decision back to both the patient and the insurer. If a patient disagrees with the review outcome, they can file an appeal with the Mutual Aid Dispute Mediation Subcommittee for a secondary expert evaluation.

Over-Treatment & "Bundled Billing" Under Scrutiny

The overuse of medical care among minor injury patients has long been cited as a primary driver of auto insurance leakage.

Data from South Korea’s four largest non-life insurers (Samsung Fire & Marine, Hyundai Marine & Fire, KB Insurance, and DB Insurance) shows that the average auto insurance treatment cost per minor-injury patient at Oriental medicine hospitals rose 26.5%, from 856,000 KRW in 2020 to 1,083,000 KRW in 2025. Over the same period, per-patient costs at conventional Western medical facilities increased by just 5.0% (from 338,000 KRW to 355,000 KRW).

The insurance industry attributes this steep cost rise to "bundled billing" (set-cheonggu), a practice wherein certain Oriental medicine providers routinely administer six or more procedures (such as acupuncture, moxibustion, cupping, physical therapy, and herbal remedies) in a single visit regardless of the severity of symptoms.

Total outpatient bundled treatment claims for minor injury patients skyrocketed at an average annual rate of 30.3%, growing from 67.5 billion KRW in 2020 to 253.4 billion KRW in 2025. This outpaced the 21.6% annual growth rate observed for severe injury patients (Grades 1–11).

Financial Impact & Market Expectations

Excessive claims have pushed the auto insurance sector deep into the red. The average loss ratio for the top four insurers in the first half of 2026 rose by 1.9 percentage points year-on-year to 84.5%.

After generating modest profits during pandemic-related travel restrictions (2021–2023), auto insurers turned a deficit of 9.7 billion KRW in 2024, which expanded dramatically to 708 billion KRW in 2025. Losses have persisted into 2026, with the top five insurers recording a combined underwriting loss of 46.1 billion KRW in the first quarter alone.

Insuretech and research institutions express optimism about the new rule. The Korea Insurance Research Institute (KIRI) estimates that enforcing the 8-Week Rule could lower overall auto insurance premium burdens by up to 3%.

However, resistance from traditional medical practitioner groups remains strong. The Association of Korean Medicine argued that the government should re-evaluate the overall classification standards for minor injuries before enforcing the rule.

A representative from the non-life insurance industry stated:

"The 8-Week Rule is not designed to restrict necessary care. Patients who legitimately require further treatment will continue to receive it following proper evaluation. By blocking moral hazard and leakage, this policy will significantly contribute to stabilizing auto insurance loss ratios."

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