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Financial regulators have chosen to reform the process in which insurance companies independently choose physicians to offer medical opinions for insurance disagreements. This initiative seeks to resolve the problem of these consultations being biased towards insurers, thus minimizing payment amounts.

On the 4th, the Financial Supervisory Service (FSS) revealed that it has entered into a business agreement with the Korean Medical Association aimed at “improving the objectivity of third-party medical consultations.” Third-party medical consultations involve insurers checking the suitability of treatment received by policyholders through independent medical institutions. These institutions are usually selected from hospitals that have prior agreements with the insurers. This practice has drawn criticism, as it is alleged that insurers select consulting institutions selectively and manipulate the outcomes to serve their own interests.

Although policyholders are legally allowed to decline the consultation, in reality, they frequently have no alternative but to comply if the insurance company demands it. Many insurance companies notify policyholders that rejecting a consultation might result in lower compensation or rejection of their claims. This has led to significant frustration among policyholders, who believe they are being compelled to accept consultations that may harm their benefits.

Under this agreement, the FSS and the Korean Medical Association will permit the association to select consulting institutions outside of those recommended by insurers. The association will assign physicians from a pre-selected group of medical consultants to carry out independent assessments. This group will include a minimum of five doctors from general or tertiary hospitals, organized by their area of expertise. The outcomes of these assessments will be shared with both the insurer and the policyholder but will only apply to the particular case being reviewed.

The FSS and the Korean Medical Association intend to complete specific implementation plans by the end of the first quarter of this year, and will test the new system for disputes concerning brain and cardiovascular issues as well as disability assessments during the second and third quarters. Lee Chan-jin, head of the Financial Supervisory Service, remarked, “This represents a significant transition from an insurer-focused approach to a consumer-oriented medical consultation process.”