The Life and Non-Life Insurance Association announced on the 28th that it has decided to extend the 50% discount on the conversion of the 4th generation indemnity insurance contract by 6 months until the end of this year.
From January to June last year, the insurance industry temporarily provided a 50% discount on insurance premiums for one year when existing indemnity insurance (1st to 3rd generation) subscribers converted to 4th generation insolvency insurance.
An insurance association official said, “We made this decision because we saw the need to accelerate the transition to the 4th generation equipped with a moral hazard prevention device.” said
The insurance industry expects that the 4th generation, which was launched in July last year, will be able to curb overtreatment and promote equity among subscribers.
For the 4th generation, if you receive a lot of uninsured treatment, your premium will be increased by up to 300%, and if you use less medical care, your insurance premium will be up to 70% cheaper than before.
It is pointed out that some medical circles have grown in losses due to moral hazard and reckless, unpaid medical shopping by a small number of subscribers.
Because non-insured medical expenses were set by individual hospitals, patients tended to use medical care excessively, and some hospitals also tended to over-treat. It was also pointed out that this was soon passed on to all subscribers, leading to an increase in insurance premiums.
The loss ratio of the old generation exceeded 130% last year due to unpaid management. This means that an insurance premium of 130 won was paid with a premium of 100 won.
Recently, a survey result showed that it would record a net loss of 112 trillion won over the next 10 years. The Insurance Research Institute estimated that by 2031, the accumulated actual loss would be 112.3 trillion won, and the loss ratio would be 166.4%.
On the other hand, you can apply for 4th generation actual loss conversion by inquiring at the customer center of the insurance company you are enrolled in or through a planner in charge.