EDITORIAL: COVID-19 insurance not the lottery


Last week, life and property insurance associations agreed to accept digital COVID-19 certificates for insurance claims without requiring a written diagnosis from a medical professional. The decision not only ended a days-long stalemate with the Financial Supervisory Commission, but should also further ease the burden on medical staff, who have been busy with a growing number of people undergoing polymerase chain reaction tests. in the middle of the last epidemic.

Before last week, insurance companies had opposed the commission’s suggestion that policyholders use digital certificates for insurance claims if they are infected or quarantined. They expressed concern that the practice could be susceptible to fraud, as digital certificates lack detailed patient information, while information provided by policyholders, rather than doctors, is difficult to authenticate. To address these concerns, the government updated the digital certificate system to include national identification numbers and a QR code with which insurers could review policyholder information.

Hospital staff are already overstretched – issuing diagnoses for insurance purposes only adds to their pressure and is a waste of scarce resources, as many non-COVID-19 patients need to be cared for. The change of course of insurers makes life easier for policyholders and hospitals, and guarantees the rights of policyholders.

However, associations remain critical of paying compensation to policyholders who test positive for COVID-19 in rapid antigen tests, even though the Central Epidemic Command Center (CECC) treats certain groups of people who test positive in rapid antigen tests. a rapid test as confirmed cases. Insurers are facing growing financial stress from high payouts to COVID-19 policyholders amid rising national infections, while the accuracy of rapid test results is still under debate. According to some estimates, insurers were expected to distribute between NT$30 billion and $90 billion (US$1.01 billion to $3.02 billion) during the latest outbreak.

The commission estimated that some insurers could be forced to increase their capital due to a decline in their capital adequacy if the number of local COVID-19 cases exceeds 3 million, as predicted by the CECC.

A decision by insurers to cancel policies or deny policyholder claims due to mounting financial pressure could have huge social implications, including potential lawsuits by policyholders and damage to insurers’ credibility.

The furore over COVID-19 insurance policies carries a painful lesson for insurers. The products have provided financial support to people with COVID-19 and families facing economic hardship over the past two years. However, as COVID-19 became a flu-like illness and the government changed its policy to coexist with the virus, insurers failed to adjust their products in a timely manner, causing many policyholders to push their luck to buy more such products. . In theory, insurance policies help people cover losses in the event of the unexpected, but COVID-19 insurance products have started to look like lottery tickets to some people.

The commission called on insurers to fulfill their obligation to COVID-19 policyholders and reminded them of the importance of public trust in financial institutions, which, if lost, takes many years to regain.

At the same time, financial authorities should closely monitor the effects of compensation payments on the financial soundness of insurers to avoid any negative impact on the entire financial system. Other government agencies should also provide assistance to insurers. For example, the Ministry of Health and Welfare could adjust the classification of COVID-19 and exclude asymptomatic and mild cases from the category of reportable communicable diseases, which would help insurers to some extent.

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