Benefit denials by insurers accounted for the bulk of insurance-related consumer complaints handled in South Korea last year, according to a Korea Consumer Agency report cited by the Seoul Economic Daily on June 7. The analysis points to a recurring pattern in which insurers’ use of third-party medical assessments has become the primary basis for rejecting policyholder claims.

Complaint volumes hold steady, refusals persist

The agency received 930 insurance-related damage relief filings in 2025. Of those, 798 – or 85.8% – involved a situation where an insurer declined to release benefits. The annual count has remained elevated compared to earlier in the decade, following totals of 756, 829, 1,067, and 978 in each year from 2021 through 2024, respectively. When insurers turned down claims, the reason they most frequently gave was that they did not recognize the diagnosis or course of treatment recommended by the policyholder’s own physician. That category covered 538 cases, or 67.4% of all benefit refusals. Disagreements over what a policy actually covers were behind 165 cases (20.7%), while disputes about how much money was owed made up 72 cases (9.0%).

Third-party assessments used to override treating doctors

Of the 538 cases where insurers rejected a physician’s diagnosis or treatment, the agency found that 377 – 70.1% – came down to the insurer’s use of an independent medical assessment. In those cases, policyholders either refused to submit to the insurer-requested review or disagreed with its findings. Among the 377 cases where an insurer-ordered assessment led to a claim denial, patients treated at general hospital-level institutions – a category that includes university hospitals – were involved in 145 cases, or 38.5%. Those seen at standard hospitals made up 31.3% (118 cases), and patients at clinics represented 30.2% (114 cases). The claims that were denied through this process averaged 16.18 million won each. The single largest share of cases – 39.1% – fell within the range of 10 million won to just under 30 million won.

Existing safeguards seen as insufficient

Both major industry associations – the General Insurance Association and the Life Insurance Association – put voluntary guidelines for medical assessment use into place in August 2021. The rules were intended to keep such assessments from becoming a default tool for rejecting claims. The Korea Consumer Agency concluded that those guidelines have not achieved their intended purpose, in part because they do not define clear limits on when an insurer may require a policyholder to undergo a third-party review. “Based on this analysis, we plan to ask the General Insurance Association and the Life Insurance Association to improve the ‘medical consultation internal control standards’ to prevent consumer harm caused by insurers’ unnecessary medical consultation demands,” the agency said, as reported by Seoul Economic Daily.

The agency outlined three steps for policyholders to take when navigating these disputes: confirm how a given insurer evaluates claims for expensive procedures that fall outside standard coverage before starting treatment; ask for written documentation when an insurer initiates a medical assessment, including the specific reasons for the request and the questions posed to the reviewing physician; and formally contest the results if the assessment outcome is considered inaccurate.

Broader industry effort underway

The agency’s findings coincide with a separate development within the non-life insurance sector reported by the Seoul Economic Daily on April 28. The General Insurance Association of Korea convened the first meeting of a newly formed consumer protection body in late April. The group drew together senior officials from the association and outside specialists in law, consumer affairs, research, and distribution. “We have reached a point where a major paradigm shift is needed – moving away from the existing approach of responding to specific issues reactively and passively after they occur, toward one in which we proactively identify and resolve improvement tasks from a consumer perspective,” General Insurance Association chairman Lee Byung-rae said at the launch ceremony, as reported by Seoul Economic Daily.

The council’s initial priorities include revisiting how fault is apportioned in auto accident claims, where the agency found that current adjustment criteria contain vague language that leads to inconsistent outcomes in similar cases, and building an automated screening tool to flag potentially misleading insurance advertisements before they are published. “We will actively incorporate the various opinions raised in the council and closely consult with relevant agencies on matters requiring legislative amendments or policy support,” a General Insurance Association official said.