"Recruiting Rear-End Accident Part-Timers"... Financial Authorities Crack Down on SNS Insurance Fraud Conspiracy Ads

Fines for Non-Compliance Such as Deleting Online Advertisements
Surge in Fraud Detection... Proposed Amendments to the 'Special Act on Insurance Fraud Prevention'
Includes Enhanced Penalties for Insurance Industry Insiders Involved

[Asia Economy Reporter Oh Hyung-gil] "Rear-end collision (ㄷㅋ) attack. Accident history: one contact accident in 2016. The record is clean. Rental cars are not accepted. Only those who are sure about advance and post payments, please leave a messenger contact in the comments. Please contact only if you want to proceed cleanly and safely without any issues." (A post on an internet cafe)

Financial authorities and the insurance industry are strengthening crackdowns by demanding related data submission and deletion from information and communication service providers where posts recruiting insurance fraud conspirators have been posted, and are pushing for fines if they do not comply.

This measure comes as posts recruiting insurance fraud conspirators by impersonating high-paying part-time jobs, such as the so-called 'rear-end collision part-time job,' have spread through online social network services (SNS) like internet cafes and Facebook, becoming a social problem.

According to financial authorities and the insurance industry on the 2nd, the Financial Services Commission, Financial Supervisory Service, Life and Non-life Insurance Associations, etc., have formed a joint task force to amend the Special Act on the Prevention of Insurance Fraud and have started related work.

Although the Special Act on the Prevention of Insurance Fraud was enacted in 2016, it has been pointed out that it cannot keep up with increasingly organized and sophisticated insurance fraud methods, prompting the preparation of improvement measures.

Since the enactment of the Special Act, financial authorities have declared a "war on insurance fraud" and have taken strong enforcement actions, but the scale of detections has been increasing every year. According to the Financial Supervisory Service, as of the end of last year, the number of people caught for insurance fraud was about 92,000, and the amount detected was 880.9 billion KRW. These figures represent increases of 10% and 22%, respectively, compared to before the Special Act was enacted. On average, 254 people are caught for insurance fraud daily.

In particular, recently, as the economy has sharply declined, organizations recruiting insurance fraud targeting people facing economic difficulties have emerged. Additionally, videos encouraging and inducing insurance fraud by claiming methods to receive large insurance payouts have surged on platforms like YouTube.

As insurance fraud spreads, financial authorities have taken decisive action. The authorities plan to strengthen enforcement by adding provisions to the Special Act on Insurance Fraud prohibiting solicitation and advertisement of insurance fraud.

The key point is to establish authority to request information submission and deletion of necessary measures from information and communication service providers regarding solicitation and advertisement of insurance fraud using information and communication networks. If related data is not submitted or necessary measures are not implemented, a fine of up to 10 million KRW will be imposed.

Additional provisions will also increase penalties for insurance industry personnel involved in insurance fraud.

If recruiters, loss adjusters, hospital or clinic staff, or repair shop workers commit insurance fraud, they will be punished more severely than general insurance fraud cases. There is also discussion about mandating immediate return of fraudulently obtained insurance money upon a confirmed fraud conviction and allowing insurers to cancel insurance contracts where fraud has occurred.

The political sphere has also taken steps to prevent insurance fraud. On the 30th of last month, Rep. Lee Joo-hwan of the United Future Party proposed a bill to the Financial Services Commission and Financial Supervisory Service to establish rights to request data provision from public insurance-related institutions and to facilitate information exchange between public and private insurance.

A financial authority official said, "Contents such as increased penalties for workers and recovery of unjust profits have already been introduced in other laws, so we are working on reflecting them in the Special Act on the Prevention of Insurance Fraud as well. We plan to submit the amendment bill to the National Assembly as soon as it is prepared."

This content was produced with the assistance of AI translation services.