Actual insurance claim process may get simplified

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By Jhoo Dong-chan

Discussion on simplifying insurance claim processing is gaining momentum as politicians are taking action for an increasing number of policyholders who gave up on their claims because of the complicated procedure.

The Korea Insurance Research Institute surveyed 2,440 Koreans aged over 20 throughout the country, and 14.8 percent of respondents said they did not submit an insurance claim after undergoing medical treatment in 2018 because the fee wasn't that expensive while the procedure to do so was too complicated.

Considering non-life insurers paid a total 7.5 trillion won (6.59 billion) worth of actual insurance benefits last year, more than 1 trillion won wasn't given to policyholders based on the survey.

Last year, Rep. Koh Yong-jin of the ruling Democratic Party of Korea proposed a bill to revise related laws to simplify the procedure for insurance claims. The bill called for the hospital the necessary documents for the policyholder's claim to the insurance company.

“The bill should be ratified immediately. Actual insurance policyholders have a right to get their claims without such a complicated procedure,” Rep. Koh said in a joint press statement with a consumer rights group last week.

In order for policyholders to claim payouts under the current system, they have to get the necessary documents from the hospital first and must then submit them with insurance companies online or via mail.

If the bill is passed, policyholders will no longer need to go through the process themselves. Upon the policyholder's request, the hospital will send the necessary documents, including doctor's notes and receipts, to insurance firms through an ATM.

Financial authorities and insurance firms welcome the proposed bill, but the medical circle strongly opposes it.

The Korea Hospital Association said in a recent press release that such a practice could lead to possible personal data leaks.

“The practice could impose an administrative burden on hospitals,” the association said. “Plus, there are not many hospitals across the country featuring such automated teller systems for insurance claims.”

According to the General Insurance Association of Korea, nearly 34 million people have insurance as of last year.