FSS to take tougher measures on screening of suspicious insurance cases

The South Korean regulator said this is to reduce fraud in the industry.

South Korea’s Financial Supervisory Service is taking a tougher stance on the screening of suspicious insurance cases to prevent the excessive disbursement of insurance payouts through overtreatment, a report by Korea Bizwire said.

The watchdog published an advance notice that it was revising the insurance fraud prevention model standards and plans to put it in force this May.

Under the revision, the FSS said it aims to prevent consumer inconvenience by an excessive investigation into insurance claims. Thus, it is limiting the scope of the investigation to cases that resist submitting reasons for medical treatment, lack of credibility, unclear treatment and hospitalisation purposes, unreasonable prices, and medical institutions suspected of over-treatment.

The FSS said it will investigate whether the insurance claims in such cases are valid through an analysis of grounds for disease treatment and advisory medical consultations.

In case of dispute, the regulator will determine whether or not to provide compensation on the basis of the judgment of a third-party medical institution whilst requesting a police investigation into the suspected insurance fraud cases.

The FSS is also making it mandatory for insurance companies to pay the interest for arrears in case they delay the payment for legitimate insurance claims.

In cases where the insurance companies reduced the amount of the payout or do not honour claims at all, the FSS will order them to explain the reason as well as to offer guidance on damage relief procedures.

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