Nearly 1,000 Cases of Unpaid or Underpaid Insurance Claims Detected Over Five Years

Unpaid and Underpaid Insurance Claims Reach 550 Million Won

Nearly 1,000 cases over the past five years have been identified in which insurance companies either failed to pay or underpaid insurance claims owed to customers, according to recent findings by the Financial Supervisory Service. The total amount involved reached 550 million won. Observers argue there is a need for stronger oversight and post-payment inspections by financial authorities regarding insurance companies' claim payout management.

According to data received on September 28 by Park Sunghoon, a member of the National Assembly's Political Affairs Committee from the People Power Party, from the Financial Supervisory Service, there were 961 cases of unpaid or underpaid insurance claims discovered during the regulator's inspections of insurance companies from 2022 through July of this year. The total underpayment amounted to 548.4 million won. Cases included insufficient payment of accrued interest as stipulated in policy terms and inadequate payment of hospitalization benefits.

Among non-life insurers, DB Insurance had the highest amount of unpaid or underpaid claims, totaling 262 million won across 26 cases. This was followed by KB Insurance with 97.9 million won (10 cases), AXA General Insurance with 73.8 million won (24 cases), and Meritz Fire & Marine Insurance with 40.5 million won (14 cases). The combined underpaid or unpaid amounts of these four companies reached 474.2 million won, accounting for 86.5% of the total.

In the case of life insurers, there were many instances of relatively small claims being underpaid to multiple policyholders. Kyobo Life had the highest number of cases, with 499 cases of underpaid accrued interest and other payments, totaling 32.7 million won. Tongyang Life had 237 cases (17 million won), Shinhan Life had 68 cases (12.9 million won), and MetLife Korea had 55 cases (7.1 million won).

The total fines imposed by the authorities on the relevant insurers amounted to 508 million won. Kyobo Life was assessed the largest penalty of 326 million won, followed by Shinhan Life with 75 million won, Tongyang Life with 46 million won, and MetLife Korea with 27 million won.

Assemblyman Park stated, "While insurers consistently collect premiums, it is unacceptable for them to fail to pay or underpay claims when insurance incidents occur," emphasizing, "Internal controls and post-payment audits must be strengthened to prevent any omissions unfavorable to consumers during the claims assessment and payout process."

This content was produced with the assistance of AI translation services.