Reforming Insurance Structure
Financial Services Commission (FSC) Vice Chairman Kim Yong-beom said on August 17 that the FSC would reform the structure of fee-for-service health insurance plans so that even patients with a medical history and retirees aged 60 or over can take out a policy. He also mentioned that it would work on innovative insurance plans closely related to industry 4.0 and micro insurance plans for specific purposes directly related to people's everyday lives.
“For South Korea to become a true welfare state, the insurance industry needs to do its part in segments where public insurance cannot provide a full coverage,” he said, adding, “The FSC will enhance the social role of insurance covering the majority of people such as car insurance and fee-for-service health insurance.”
In this context, the FSC and the Ministry of Health & Welfare are going to precisely analyze a decline in fee-for-service insurance loss ratio that is likely to follow the government’s recently announced plan to increase the coverage of the national health insurance before reforming the current structure of fee-for-service health insurance as mentioned above.
Examples of the micro insurance plans for specific purposes, in the meantime, include those for bicycle riders, skiers, public transit users, housing deposit payers, etc. At present, these types of insurance plans are available only as special agreements of accident insurance although they can be individually sold in view of their diversity and loss ratios.
When it comes to the innovative insurance plans, the vice chairman asked insurers to come up with more of those making use of autonomous driving, the Internet of Things (IoT), healthcare technology, electric vehicle technology and the like. In this regard, the FSC is going to present guidelines on the development of such insurance plans while letting standard terms to be prepared by a private association instead of the financial authority. “Various risk management methods need to be introduced by the use of big data analysis and so on and new insurance plans need to be prepared against new types of risks such as hacking attempts,” he remarked.