SEOUL, Nov. 10 (Korea Bizwire) — South Korean insurance companies will now be obliged to undergo deliberations by internal committees before exercising indemnity rights against minors and economically vulnerable people and the result of the deliberations should be disclosed to the public.
This move is part of efforts to prevent the recurrence of a controversy that erupted in March when an insurance company filed an indemnity suit against an elementary school student who became a virtual orphan after his father died in a traffic accident.
The Financial Services Commission announced on Sunday that it will expand the scope of the matters subject to the pre-deliberation of insurance companies’ litigation management committees, while toughening the rule on the disclosure of the litigation they are engaged in.
To cope with the new regulations, the nation’s insurance companies are set to revise their internal rules by the end of this year.
The insurance companies’ litigation management committees are internal bodies that are responsible for deliberating on whether or not to file suits against consumers.
Thus far, the committees have deliberated on litigation associated with the return of paid insurance money and the confirmation of non-existence of debts.
The indemnity litigation, however, has been excluded in the list of the matters subject to deliberation.
In the future, however, the committees should expand the scope of deliberation to cover the litigation associated with the indemnity against economically vulnerable groups, as well as the one for debts that have passed the statute of limitations regardless of whether the subjects are in economically vulnerable groups or not.
J. S. Shin (email@example.com)