Implementation of the Amendment to the 'Special Act on Prevention of Insurance Fraud' for 5 Months... Over 400 People Referred for Investigation

FSS Detects Advertisements for Intentional Car Accidents and Other Insurance Fraud Activities

The Financial Supervisory Service (FSS) announced on the 14th that since the enforcement of the amended Special Act on the Prevention of Insurance Fraud in August last year, it has identified and requested investigations into approximately 400 insurance fraud offenders.

Following the enforcement of the amended Special Act on the Prevention of Insurance Fraud on August 14 last year, the FSS operated an intensive publicity period. It actively promoted the fact that even acts of facilitating insurance fraud would be punishable and closely monitored related advertisements and posts on about 10 major internet sites.

The FSS conducted two planned investigations related to advertisements for intentional car accidents posted on high-paying part-time job sites in online cafes, requesting investigations into 19 suspects. To verify facilitation acts, the FSS requested data from Naver, Kakao, and others, secured personal information of suspects, and through analysis and investigation of related materials, confirmed 24 cases of intentional car accident fraud. Major non-life insurance companies also identified about 380 suspects through their own investigations into facilitation of insurance fraud and requested investigations from the relevant police stations.

The FSS has established a collaborative system for organic data sharing among related agencies and is conducting investigations into new themes of insurance fraud. Recently, the FSS received a tip that used car dealers and performance inspectors colluded to embezzle used car performance liability insurance payments. Accordingly, the FSS requested data such as vehicle registration records necessary for investigating used car insurance fraud from the Ministry of Land, Infrastructure and Transport and is currently analyzing them. If the allegations are confirmed, a prompt investigation request will be made.

Cases suspected of insurance fraud involving forgery or falsification of cancer diagnosis certificates and related insurance claims are also on the rise. The FSS requested and received selected suspects’ medical benefit details from the National Health Insurance Service and is analyzing them. If the allegations are confirmed, the FSS will request investigations and actively support them.

With the enforcement of the amended Special Act on the Prevention of Insurance Fraud, which legally mandates the obligation to notify damages from automobile insurance fraud, the FSS standardized notification deadlines, methods, and refund procedures that had been conventionally practiced, thereby strengthening consumer damage relief. From August to October last year, the FSS provided refund guidance by insurance company to policyholders who did not receive increased premiums due to automobile insurance fraud. During this period, 23 million KRW was refunded to 877 people (2,387 cases).

An FSS official stated, "Insurance fraud undermines the foundation of the insurance system and is a representative financial crime that infringes on the livelihood of the public by causing premium increases for honest policyholders. We will respond swiftly and strictly to new, increasingly sophisticated and organized insurance fraud methods through close cooperation with related agencies."