SEOUL, 22 April 2025 — South Korea’s non-life insurance sector is set to implement sweeping changes to caregiver health insurance coverage starting in May, following regulatory pressure from financial authorities aimed at curbing excessive benefits and misuse of the system.
The Financial Supervisory Service (FSS) has directed major non-life insurers to revise their caregiver-related insurance policies. Under the new guidelines, coverage will be limited strictly to patients with severe illnesses, effectively excluding claims for mild conditions such as spinal sprains. The move follows a surge in consumer complaints and disputes, particularly involving non-payment of long-term care claims since last year.
Authorities have raised concerns that generous caregiver benefits have encouraged overtreatment and led to unsustainable claim patterns. In response, insurers will scale back coverage by clearly defining limits on daily hospitalisation benefits and eliminating provisions deemed excessive. The revisions are also aimed at addressing insurers’ rising loss ratios attributed to caregiver-related claims.
Insurers have until the end of April to implement the new standards based on internal data, including actuarial assessments. The updated product offerings, which will distinguish more clearly between mild and severe cases, are expected to be in effect from May.
The FSS emphasized that the revisions are essential to maintaining the integrity and long-term viability of caregiver insurance coverage. The reforms mark a significant shift in how non-life insurers handle caregiving claims and signal a broader effort by regulators to realign insurance practices with sustainable health care principles.
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