Insurance scammers get off easy: FSS

Home > Business > Finance

print dictionary print

Insurance scammers get off easy: FSS

The Financial Supervisory Service (FSS) said yesterday that the government needs to impose heavier legal punishments on those who commit insurance fraud to root out such crimes as many end up receiving light punishments.

According to a case study book published by the financial watchdog that contains criminal court rulings on insurance fraud, 72.1 percent of 796 violators who faced criminal trials on charges of insurance fraud between 2010 and 2011 ended up with just a fine.

Only 10.6 percent, or 84 violators, got prison sentences, while the remaining 17.3 percent got suspended terms.

They earned a combined 14.4 billion won ($13.4 million), or 18 million won each on average, by deceiving insurance companies from 2010 and 2011.

Scams involving car insurance policies were the most popular, as scammers work in groups to conspire fake accidents and opportunistic injuries, such as by jumping in front of a car being driven by an accomplice.

Of the total, 651 violators are involved in car insurance fraud, with each person raking in 9 million won illegally on average. The remaining 145 criminals are mostly involved in life insurance and organ damage insurance policies, with each person yielding 60 million won on average.

According to the financial watchdog’s case book, a court handed a 20-year jail sentence to a man surnamed Kang for receiving a life insurance payout of 180 million won after killing his Cambodian wife by setting their house on fire after she fell asleep. The wife had allegedly taken sleeping pills at the demand of her husband.

According to police, Kang had subscribed to six fire accident and life insurance policies under his wife’s name. He also sought to collect a combined 1.1 billion won in insurance payouts from other firms before he was busted.

“Insurance fraud is a grave crime as it ends up hurting other subscribers by raising the overall policy fees,” said Kim Hak-moon, an official at the FSS. “There are many recidivist offenders so judicial bodies need to toughen their criminal charges against violators.”


By Kim Mi-ju [mijukim@joongang.co.kr]
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now