▲Conflict over revisions to the Enforcement Decree of the Automobile Compensation Liability Guarantee Act remains unresolved. [Image=Perplexity]
Implementation of the so-called 8-week rule—which would require additional review for minor traffic-injury patients who continue treatment beyond eight weeks—has been delayed. Disagreement among insurers, traditional Korean medicine practitioners and patient groups has made it difficult to reach a compromise. Officials say they will announce a revised launch date in mid-April, but sources caution the rollout could be postponed again.
Industry sources say the draft amendment to the Enforcement Decree of the Automobile Compensation Liability Guarantee Act, which contains the 8-week rule, recently cleared review by the Office of Legislation. The amendment was opened for public comment in June last year as part of a wider effort to curb fraudulent auto insurance claims. It was originally slated to take effect in January but has been pushed back to March 1 and then April 1 amid sustained opposition.
Even if the Cabinet approves the measure, questions remain about when regulators will actually apply it. With local elections roughly two months away, officials may delay implementation further to avoid appearing to target particular groups during a politically sensitive period.
Medical organizations, including the Association of Korean Medicine, argue the amendment could restrict patients’ right to treatment. They contend it’s problematic for an external body—not treating clinicians—to determine medical necessity. One proposal to move the review authority from insurers to the Automobile Compensation Promotion Agency under the Ministry of Land, Infrastructure and Transport is seen as an attempt to ease patient concerns.
◇ Targeting malingerers and insurance fraud
Insurers have repeatedly raised the issue to manage auto insurance loss ratios. The industry posted a cumulative loss of 700 billion KRW (525 million USD) last year, and most analysts expect it will be hard to return to profitability this year. The combined loss ratio for January and February was in the high-80s percentage range, below the breakeven point.
Insurers say some claimants exploit the system by claiming long-term treatment for minor accidents and collecting sizable payouts, and they are pressing for tougher reviews. To detect fraud involving medical professionals, the government and insurers now operate reward programs for whistleblowers.
Data from financial authorities also underscore the perceived need for the amendment. The Financial Supervisory Service reported roughly 572.4 billion KRW (429.3 million USD) in detected auto insurance fraud last year—accounting for 49.5% of detected fraud. The totals were similar in 2023 and 2024. While the number of detected perpetrators has dipped slightly, it still exceeds 60,000 people.
By type, manipulation or exaggeration of driver, vehicle or accident date was the largest category, accounting for 19.6% of detected cases by headcount.
Insurers also face pressure from policyholders. Drivers who practice safe driving complain that excessive treatments and overbilling push costs—and therefore premiums—higher.
Insurers implemented an average rate increase of about 1.3% starting in February to coincide with policy renewals. Although the rise is timed to renewals, it adds financial pressure in an already high-inflation environment. The industry argues that a fairer compensation system is needed to break this cycle.
◇ Dispute over whether eight weeks is reasonable
The two sides remain at odds over whether an eight-week cutoff is appropriate. Medical professionals say a fixed time limit is too blunt an instrument and could deter patients from continuing necessary care because of added administrative burdens. They also note that recent changes to injury grading have reclassified some moderately severe cases as minor, an issue the rule must address.
Supporters counter that more than 90% of minor injury patients complete treatment within eight weeks, which bolsters their case and reduces the risk of the rule being seen as an outright denial of care. Under the proposal, patients who pass the additional review would be allowed to continue treatment beyond eight weeks.
The fact that 87.9% of patients treated for more than eight weeks sought care at traditional Korean medicine hospitals has intensified the debate, with critics pointing to those clinics as the center of excessive treatment claims.
An industry official warned that if policymakers miss the "golden time" ahead of local elections and the upcoming parliamentary audit season, implementation could be delayed further. He described the amendment as a minimal measure to curb moral hazard.
Reporter Kwangho Na spero1225@ekn.kr
