(1) Reasons for Proposal

The government has announced a plan to reorganize the overall product structure (“With indemnity medical insurance, a newly introduced discount or surcharge system, you can pay only premiums for the medical service used.” Press release on Dec. 9, 2020) so that the indemnity medical insurance can faithfully perform the function of the private safety net of national health, and as a follow-up measure to this, this amendment aims to reflect the new contents related to indemnity medical insurance in the Regulation on Supervision of Insurance Business.

(2) Major Provisions

A. Reorganize the product structure, such as adjusting copayments, deductibles, and the reinsurance cycle (Article 7-63 (2)) 

Operate covered service (main contract) and non-covered service (special agreement) separately; set a copayment of 20% for covered service (main contract) and minimum deductibles of 10,000 won (for hospital and medical clinic level) and 20,000 won (for higher level and general hospitals); set a copayment of 30% for non-covered service (special agreement) and a minimum deductible of 30,000 won; shorten the reinsurance cycle (the insurance period and coverage change cycle) to 5 years.

B. Provide grounds for the insurance premium sliding scale application method for non-covered service (Article 7-73 (9)) 

Stipulate that in principle, when calculating a comparison degree (discount or surcharge premium rate) of premium rate of a rider that guarantees non-covered service, the discount rate shall be adjusted so that the total premium level before and after the application of the comparison degree is identical.