Mentally disabled are barred from life-insurance coverage
Insurance companies routinely shun disabled applicants and their claims without any reasonable cause, according to the National Human Rights Commission of Korea. To make matters worse, the commission says, the body in charge of monitoring insurance companies on the matter and preparing appropriate legal action is "indifferent" to the unfair practices of insurance companies. A year ago, the National Human Rights Commission of Korea recommended that the Office of the Prime Minister, the Ministry of Justice, the Ministry of Finance and Economy, and the Financial Supervisory Service (FSS) consider an amendment of related laws in order to improve the standards of evaluation for disabled applicants, based on the results of a survey meant to query discrimination within the insurance industry. The Financial Supervisory Service, jointly with the insurance industry, has prepared a countermeasure that would abolish the current standards applied toward insurance applications of the disabled, as well as abolish the separate insurance designed exclusively for the disabled, both of which have been called discriminatory. It is widely known in the insurance field that ’exclusive’ insurance is hardly ever sold, as disabled applicants are still turned away because of internal standards at insurance companies. If disabled applicants wish to obtain ordinary insurance rather than the disabled-only insurance, insurance companies turn a deaf ear toward their requests, disabled applicants said.When asked, insurers were unabled to provide reliable statistics to back this pratice, insurers regularly discriminate under the misconception that they are exposed to a higher chance of ‘paying out’ to disabled clients than to others. The mentally disabled suffer the worst discrimination within insurance circles. A father of a son with mental disability subscribed the disabled-only accident insurance last month. Within one week of subscription, he received a cancellation notice that said, "The mentally disabled are not subject to this insurance." The rationale as explained by the insurance company was that the insurance to which the son subscribed included life insurance coverage, and Article 732 in current Commercial Law prohibits the subscription to life insurance by the mentally disabled. "Where does it say that my son will be involved in an accident more than others?" the father asked angrily. The National Human Rights Commission last year suggested abolishing the Article, which reads, "Notwithstanding the degree of disability, the mentally disabled cannot subscribe to life insurance." But the chances of any changes done to this article within the year seem remote. An FSS’ afficial said, "Without this Article, the mentally disabled will be exposed to the insurance criminals who are after life-insurance benefits. The issue must be reviewed further." Kim Dong-sung, the manager of the Insurance Actuarial Team at the FSS, said in an interview that the FSS is working with the Ministry of Health and Welfare to use National Health Insurance data to establish statistical findings on the accident risk of disabled persons versus the non-disabled. "Once we access the data, we will be able to come up with a reasonable standard" [for insurance issuance practices], he says.
