Refund of 1.6 Billion KRW in Increased Insurance Premiums to Victims of Car Insurance Fraud

Refund Amount Up 28.7% Year-on-Year
FSS to Inspect Status of Surcharged Premium Refunds

Approximately 1.6 billion KRW in unfairly surcharged insurance premiums were refunded to victims of automobile insurance fraud.

On the 7th, the Financial Supervisory Service (FSS) announced that it refunded about 1.57 billion KRW in unfairly surcharged automobile insurance premiums to 3,426 victims of automobile insurance fraud last year. This amount represents a 28.7% (350 million KRW) increase compared to the previous year (1.22 billion KRW).

Since June 2009, the FSS has been operating a relief system in cooperation with the Korea Insurance Development Institute and non-life insurance companies to refund surcharged premiums unfairly borne by victims of automobile insurance fraud. Following the amendment of the Special Act on the Prevention of Insurance Fraud on August 14 last year, obligations such as notifying victims of automobile insurance fraud and refunding surcharged premiums were codified into law. Consequently, previously customary practices regarding notification deadlines and refund methods for surcharged premiums were also formalized.

In December last year, the FSS inspected 12 non-life insurance companies regarding the notification of automobile insurance fraud victims and the collection and management of court rulings as part of the relief procedures. Most non-life insurers properly complied with the notification of victims and related procedures. However, some insurers were found to have shortcomings, such as failing to share victim information with the Korea Insurance Development Institute.

An FSS official stated, "We will continue to inspect the refund status of surcharged premiums due to automobile insurance fraud annually to ensure that relief procedures for insurance fraud victims are conducted thoroughly." The official added, "To systematically manage long-unrefunded surcharged premiums, we plan to consult with related agencies and consider measures such as contributing unclaimed surcharged premiums to dormant insurance funds."