Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Insurance fraud rises for 5th straight year due to lax punishments
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By Yi Whan-woo
Fraudulent insurance claims rose for the fifth straight year in 2023 as more than 90 percent of scammers serve a jail term of less than three years and experience relatively mild punishments, the Financial Supervisory Service (FSS) said Wednesday.
The country’s financial watchdog said that insurance scammers took 1.12 trillion won ($815.18 million) through wrongful filings in 2023.
“The amount marks an increase for consecutive years since 2019,” the FSS said, noting that it rose by 235 billion won from 2019 when 880.9 billion won was reported.
It went on to say that the number of suspects involved hit 109,522 – the highest level over the cited five years.
The FSS said that the fraud is “getting more sophisticated , whereas a slap on the wrist is what criminals get in return for their wrongdoings.”
It pointed out several health fraud cases involved fake patients and insurance planners, as well as doctors and nurses who “carried out a division of labor that is present in business corporations.”
Of the extreme cases, a total of 342 fake patients were arrested by the police in South Chungcheong Province during June 2023 alone.
Citing the Korea Insurance Research Institute, the FSS then pointed out that 94 percent of scammers were given fines and faced suspended jail terms or less than three years behind bars.
“The fact that only 6 percent of these criminals serve time in jail for three years or more indicates a need for tougher punishments,” the FSS said. “We can’t otherwise root out evolving forms of insurance fraud."