(Image: Korea Bizwire)
SEOUL, April 28 (Korea Bizwire) — South Korea’s financial regulator said it has decided to toughen its screening of suspicious insurance cases as part of efforts to prevent the excessive disbursement of insurance payouts through overtreatment.
The Financial Supervisory Service (FSS) made an advance notice on the revision to the ‘insurance fraud prevention model standards’ on Wednesday and plans to put it in force next month.
Under the revision, the FSS will toughen the screening of suspected insurance fraud cases as part of efforts to prevent excessive insurance payouts.
Instead, to prevent consumer inconvenience by excessive investigations into insurance claims, the watchdog limited the scope of investigations to the practice of resisting the submission of grounds for treatment, lack of credibility, unclear treatment and hospitalization purposes, unreasonable prices and medical institutions suspected of overtreatment.
In such cases, the FSS will investigate whether the insurance claims are valid through an analysis of grounds for disease treatment and advisory medical consultations.
If disputes arise with insurance policy holders during this process, the FSS will determine whether or not to provide compensation on the basis of the judgment of third-party medical institutions, while requesting a police investigation into suspected insurance fraud cases.
Moreover, to protect consumer rights, the FSS made it mandatory for insurance companies to pay the interest for arrears in case they delay the payment for legitimate insurance claims.
In case insurance companies reduce the amount of the payout or do not honor claims at all, the FSS also obligated them to explain the reason as well as to offer guidance on damage relief procedures.
J. S. Shin (js_shin@koreabizwire.com)
