Chairman Chang Nam-sik of the General Insurance Association of Korea (GIAK) urged the government to create a system to manage non-insurance covered medical expenses to ease the burden on the people.
At a special media meeting on the occasion of the GIAK’s 70th founding anniversary, he said such medical expenses as those not covered by the National Health Insurance System should be managed by a system that the government can only set up to ease the burden on the people.
He said around 80 percent of the expenses not covered by the National Health Insurance System are paid by the people, as they are not covered by the non-life insurance firms. The chairman has one year left in his three-year term and will devote his time to solve problems related to non-covered medical expenses during that time.
Making the problem more acute is that non-insurance covered medical expenses vary greatly from clinic to a clinic, creating a bigger burden on the non-life insurance firms and their patients. Patients have to pay whatever they are charged for treatments not covered by medical insurance policies. Life insurance and non-life insurance firms are being asked to pay those medical expenses by patients, which are either not covered by insurance policies or are too exorbitant, hurting the financial conditions of the insurance firms.
People without insurance policies for their medical expenses are liable for the exorbitant medical bills, the chairman said. He said that even those with medical insurance policies have to pay medical expenses by themselves, as they fall outside of the insurance policies they hold.
What makes the situation more difficult to take care of has been that the medical expenses don’t have codes, meaning that non-insurance covered medical treatment taken care of at a hospital cannot be recorded, Chang said.
In the meantime, the chairman said GIAK will find new growth engines for non-life insurance firms by developing new insurance products in connection with information leaks and crimes committed by the use of drones.
He said such new insurance products to cover new kinds of dangers are significant in that they would boost incomes for the non-life insurance firms, but also expand their areas of operation.
The chairman said he will do his utmost to develop non-life insurance products that can be useful in covering damage from unforeseen incidents so that the role of the non-life insurance industry will strengthen the social safety network.
He outlined an insurance product that reimburses clients for damage from a leak of information and data; for medical organization responsibility; and payment for damages caused by drones, among other non-life insurance policies to be developed.
Chang also noted that the preparation for the introduction of the IFRS4 2nd Stage to ease the burden on the non-life insurance industry could also be an important task for GIAK. The new system could make the burden on the non-life insurance firms heavier, as the insurance debts are to be translated in monetary value.
He said the non-life industry has many insurance products that pay from three to four percent in annual interest, and therefore the industry is destined to get hurt when the debt accounting system is changed.
The GIAK chairman said he will propose to that financial authorities come up with policies to boost the capital of non-life insurance firms.
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