News eDaily22 Aug 2017

South Korea:Regulator urges insurers to design products for IoT

22 Aug 2017

The Financial Services Commission (FSC) is encouraging insurers to design innovative products for new technology applications.

FSC Vice Chairman Kim Yong-beom said last week that the products could cover self driving, the Internet of Things (IoT), healthcare technology, electric vehicle technology and the like, reported Business Korea.

In this regard, the FSC will present guidelines on the development of such insurance plans. It will task a private association to define standard terms in place of the financial authority.

The regulator will also 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.

This would be part of the regulator's work to promote innovative insurance plans and micro insurance plans for specific purposes directly related to people's everyday lives.

The FSC and the Ministry of Health & Welfare are going to analyse in detail the decline in fee-for-service insurance loss ratio that is likely to follow under 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, reported Business Korea.

President Moon Jae-in has said that the government will start this year to build a country where, by 2022, every single Korean is free from the worry of medical bills and can be treated for any disease. The Ministry of Health and Welfare said that national health insurance will cover all medical expenses except those for cosmetic purposes. 

Social role of insurance

Mr Kim said: “For South Korea to become a true welfare state, the insurance industry needs to do its part in segments where public insurance cannot provide full coverage.

“The FSC will enhance the social role of insurance covering the majority of people such as car insurance and fee-for-service health insurance.”

Examples of microinsurance plans for specific purposes include those for bicycle riders, skiers, public transit users, housing deposit payers, etc. At present, these types of insurance plans are available only as a special rider to accident insurance cover although they can be individually sold in view of their diversity and loss ratios.



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