It has been confirmed that NH Nonghyup Property & Casualty Insurance is engaging in so-called "tying," making simultaneous subscription to other products a condition for signing up for indemnity health insurance (indemnity insurance), through corporate insurance agencies (GA; General Agency). As losses on indemnity insurance have recently grown, the company is selling other insurance at the same time to offset them. The Financial Supervisory Service warned that it would check to ensure that no linked sales of other products occur when selling 5th-generation indemnity insurance to curb such practices, but tying is still taking place in frontline sales.
According to the non-life insurance industry on the 11th, a woman in her 30s, identified as A, received a consultation in Jan. through a GA-affiliated planner about signing up for NH Nonghyup P&C's 5th-generation indemnity insurance. A said she intended to enroll only in NH Nonghyup P&C's indemnity insurance and sign up for a comprehensive policy with another insurer, but the planner responded that "under NH Nonghyup P&C rules, you cannot enroll in indemnity insurance unless you also enroll in a comprehensive policy."
Accordingly, A enrolled in an NH Nonghyup P&C comprehensive insurance policy costing about 50,000 won per month. However, A was receiving treatment around the same time for a traffic accident, and her application for indemnity insurance was rejected. The planner then said they would help her re-enroll in indemnity insurance three months after her treatment ended. That is because, during underwriting for indemnity insurance, physicians' findings from the previous three months are reviewed.
When A applied again for indemnity insurance earlier this month, the planner said, "I failed to inform you of the rule that there must be a comprehensive policy enrollment within one month for indemnity insurance to be available," and advised that she needed to enroll in an additional comprehensive policy.
Some non-life insurers, like NH Nonghyup P&C, are presenting simultaneous enrollment in other insurance products as a condition during consultations, citing the worsening loss ratio of indemnity insurance, but the Financial Supervisory Service (FSS) views this as an unfair sales practice. Lee Chan-jin of the Financial Supervisory Service (FSS) said in Mar., "We will conduct an overall review and provide strong guidance to ensure that no linked sales of separate products occur when selling 5th-generation indemnity insurance."
In the "third-party risk management guidelines for insurers" released last year, the Financial Supervisory Service (FSS) stipulated that primary insurers must systematically manage GAs to prevent mis-selling. However, on the sales front lines, this practice continues for the purpose of increasing revenue.
After reporting began, NH Nonghyup P&C and the GA changed their position and told A they would help her enroll in indemnity insurance alone. An NH Nonghyup P&C official said, "We plan to clearly guide that GA on the conditions for standalone enrollment in indemnity insurance going forward, and we will conduct regular training on indemnity insurance enrollment to prevent the recurrence of similar complaints and to ensure that a sound solicitation order is maintained."