By Kim Tae-gyu
Staff Reporter
Saying he was in a hurry, a teenage passenger asked a taxi driver to head down the wrong way on a one-way road in central Seoul early this year, as it was a short-cut to his destination.
After checking if any cars were on the move, the driver reluctantly got on the road after the repeated requests of the high-school student, who indeed looked as if being in haste.
Then, all of a sudden a motorcycle appeared and collided with the taxi. Even though it was just a fender bender, the driver's insurance company paid 1 million won to the cyclist.
The driver could not complain because he violated the traffic regulations. He was actually thankful to the cyclist, who didn't take the case to the court.
However, this was actually an insurance crime involving a total of 11 high school students. They created similar accidents 10 times from May 2008 to this April, in order to get 8.5 million won from insurers.
As sophisticated insurance frauds are on the rise, the Korean government decided to build a task force next month that will crack down on fraud throughout this year.
The Financial Supervisory Service (FSS) and the Financial Services Commission will lead the ad-hoc team, which expires this December, together with police and the prosecution.
``Because insurance frauds got sophisticated, we also need to set up a team whose staff will focus only on catching insurance-related criminals,'' an FSS official said.
``The task force will be empowered to exploit all the data available, such as clinical tests of insurance fraud suspects. If it works, we may keep it in operation beyond this year,'' he said.
Insurance crimes have surged over the past few years. Last year, a total of 254.9 billion won was paid out due to insurance fraud, up 24.6 percent from a year ago.
Including uncaught attempts, the overall payments based on the fraudulent claims are estimated to be much higher.
The Korea Insurance Development Institute estimated the amount would reach 2.4 trillion won between April 2007 and March 2008.
``We think fraudulent claims account for a substantial portion of all claims received by our insurance companies,'' the FSS official said.
"They damage not only insurance firms but also innocent people, who will sign up insurance products, since such payments usually prompts insurers to raise premiums,'' he said.