Hi, it’s Tony back! On 24th of December, 2012, the FSC made an official announcement about ‘standard indemnity insurance products’. This announcement should be understood with regards to the fact that there have been substantial amendments to financial supervision and regulation in insurance industries. With the new announcement, insurance companies sell standard indemnity insurance products as of 1st of January, 2013.
Then what is the betterment of the amendments?
- Sales of standard type of solitary insurance products with 20 percent of allotment
- Alternation period of guaranteed contents for up to maximum 15 years
- Alternation period of insurance payments for up to one year.
- Notification in advance with regards to excessive fluctuations (average 10 percent) in calculated risks.
All these new changes provide better and more diverse products for financial consumers looking for new indemnity insurance products. Moreover, companies selling medical-related insurance products are also obliged to sell the standard type of solitary products. Otherwise, they must notify the FSC in advance of such solitary products not offered and thus unavailable for financial consumers.
Most importantly, there is a big change with regard to insurance guarantee period. If an insured person holds an insurance contract without changes in payment, guarantee range and so on, an insurer should provide a guarantee till the insured becomes the aged. The guarantee range should be the same as the current rage. In case of re-signing an insurance contract, the period of changes in guaranteed contents is up to maximum 15 years. There is no disadvantage when the insured extends the contract after the period. Also, an insured person without medical problems may choose another insurance product when renewing a contract.
A related officer working for financial authority said that, “The amendments to regulations for insurance products are receiving substantial attention. This is because those amendments are expected to bring lots of benefits for financial consumers by alleviating economic burdens of insurance payments. They will contribute to lower the cost of insurance products and medical treatments.” As those amendments are remarkable changes, it is important to let the public easily understand those changes and access to benefits. Various channels of financial services should be offered as well.