It has been confirmed that NH Nonghyup Property & Casualty Insurance is engaging in so-called "tying," making concurrent enrollment in other products a condition for signing up for indemnity medical insurance (indemnity insurance), through corporate insurance agencies (GAs; General Agency). As losses on indemnity insurance have recently grown, the company is selling other insurance simultaneously 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 stop such sales practices, yet tying is still taking place on the front lines.
According to the non-life insurance industry on the 11th, a woman in her 30s, identified as A, received a consultation in Jan. on enrolling in NH Nonghyup P&C's 5th-generation indemnity insurance through a GA-affiliated agent. 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 agent responded, "If you do not enroll in the comprehensive policy together, under NH Nonghyup P&C rules you cannot enroll in the indemnity insurance."
As a result, A enrolled in an NH Nonghyup P&C comprehensive policy with a monthly premium of 50,000 won. However, A was receiving treatment due to a traffic accident around the same time, and her indemnity insurance enrollment was rejected. The agent then said they would help her re-enroll in the indemnity insurance three months after her treatment ended. This is because, during underwriting for indemnity insurance, doctors' examination findings from the previous three months are reviewed.
When A applied again for indemnity insurance earlier this month, the agent said, "I failed to inform you of the rule that a record of enrolling in a comprehensive policy within one month is required to enroll in indemnity insurance," and advised that she needed to enroll in an additional comprehensive policy.
Like NH Nonghyup Property & Casualty Insurance, some non-life insurers are presenting concurrent enrollment in other insurance products as a condition during consultations for indemnity insurance, citing the deterioration in the indemnity loss ratio, 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 overall checks and provide strong guidance to ensure that no separate linked sales occur when selling 5th-generation indemnity insurance."
In the "third-party risk management guidelines for insurance companies" released last year, the Financial Supervisory Service (FSS) stipulated that primary insurers must systematically manage GAs to prevent mis-selling. However, on the front lines of sales, such practices continue for the purpose of increasing revenue.
When reporting began, NH Nonghyup P&C and the GA changed their stance and told A they would help her enroll solely in indemnity insurance. An NH Nonghyup P&C official said, "Going forward, we will clearly inform the GA in question of the conditions for standalone enrollment in indemnity insurance, and we will conduct regular training related to indemnity insurance enrollment to prevent similar complaints from recurring and to ensure a sound solicitation order is maintained."