Backlash Over Mandatory Card Payments: Politicians Slam Revised Insurance Business Act
Insurance Industry Breathes a Sigh of Relief as Mandatory Credit Card Payment Bill Faces Challenges
The partial amendment to the Insurance Business Act, which aimed to make it mandatory for insurance companies to accept credit card payments, is facing significant challenges in the National Assembly.
The review opinions submitted to the Political Affairs Committee have been largely negative, citing concerns over the principle of freedom of contract and the difference between public and private insurance.
The insurance industry is relieved, as the burden of implementing mandatory credit card payments would have been considerable. The industry is also concerned about the potential increase in business expenses and the impact on policyholders.
The review report highlighted several issues with the proposed amendment, including the fact that insurance contracts are private agreements between insurance companies and policyholders, and that the means of payment should be decided autonomously.
Additionally, the report noted that the difference between public and private insurance should be recognized, particularly with regards to card payments for national pension and national health insurance.
The Financial Services Commission has also expressed concerns over the proposed amendment, citing the potential for increased burdens on policyholders and the need to consider the consistency of laws regarding card use among financial products.
The industry believes that the negative review opinions will make it easier to respond to future state audits and other challenges. An industry insider noted that it is rare for a bill with a negative review report to pass the bill review subcommittee.
The proposed amendment was intended to improve the convenience of payment for policyholders, but the industry is concerned that the benefits may not outweigh the costs. The issue is expected to be closely watched in the coming weeks as the National Assembly continues to debate the proposed amendment.
Reporter Lee Jae-ho jhlee@insweek.co.kr