Starting next year, parents expecting triplets or more will be able to purchase fetal insurance without restrictions. Previously, some insurance companies had refused or limited coverage for multiple births due to the higher risk of complications. However, the financial authorities have stepped in to address this issue.
The Financial Services Commission and the Financial Supervisory Service discussed these plans at the 5th Insurance Reform Meeting, chaired by Vice Minister Kim So-young on the 16th. The authorities announced that they will revise the underwriting criteria for fetal insurance for multiple births starting from January next year, allowing all parents of multiple births without pre-existing conditions to purchase coverage.
Additionally, the authorities plan to improve the formal insurance product explanation requirements by the end of next year, which have been criticized for leading to incomplete sales.
Existing insurance explanations have often been criticized for being too lengthy, using excessive technical jargon, and being presented in dense, paragraph-style formats, making them difficult for consumers to understand. To address these issues, the authorities will simplify, visualize, digitalize, and standardize insurance product explanations. Important information will be presented visually using infographics, and digital assistants such as AI chatbots and videos will be utilized to make explanations more user-friendly.
The authorities will also strengthen the comparison and explanation obligations for insurance agents working for corporate insurance agencies (GA). Going forward, insurance agents must separately disclose commission fees when comparing insurance products to prevent sales from being concentrated on products with high commissions.
To prevent improper replacement of existing insurance policies with new ones, where agents induce policyholders to cancel their existing policies, the system for providing comparisons between old and new contracts will be upgraded.
The authorities are also considering measures to encourage sound management by insurance companies. Insurance companies are currently subject to different deposit insurance premium rates based on the results of their financial soundness assessments. The authorities plan to revise the assessment criteria to reflect the new International Financial Reporting Standard 17 (IFRS17) and ensure that insurance companies that have fully implemented reform initiatives pay lower premiums.
Vice Minister Kim emphasized that the authorities will "steadily promote the tasks of the insurance reform committee according to the original plan and schedule," and that "the reform of health insurance is a crucial task for normalizing the medical system, and the authorities have a strong will to complete the reform."
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