FSC tells insurers to make wording clearerThe head of the financial regulator on Tuesday urged insurance firms to make their insurance policies easier to understand and explain insurance plans in the simplest terms.
Choi Jong-ku, chairman of the Financial Services Commission (FSC), made the remarks at a meeting with senior executives of insurance firms earlier in the day.
Understanding insurance policies is too difficult for consumers because of complicated language and terminology, the senior official said.
Choi, who served as a chief executive of Seoul Guarantee Insurance Co. in 2015, said he also failed to follow his insurance policies to the end because they are too complicated.
To help make insurance policies easier to understand, the FSC will encourage insurance firms to let consumers participate in efforts to write, verify and evaluate policies, Choi said.
Last year, Samsung Life Insurance decided to partly compensate about 55,000 clients of its immediate payment annuities over a payout dispute, defying the advisory by financial authorities to provide full compensation.
A client buys an immediate payment annuity with a single, lump-sum payment, and an insurer pays guaranteed income to the client about a month after the contract is signed.
In 2017, a client of Samsung Life’s immediate payment annuity filed a complaint with financial authorities, claiming that the insurer must guarantee minimum returns of 2.5 percent per annum.
The minimum returns were used to calculate guaranteed income of the annuity contract, but were not specifically mentioned in the contract, according to FSC officials.