Report "Nylon Patients" in Auto Insurance... Financial Supervisory Service Extends Special Insurance Fraud Reporting Period

Deadline Extended from March to October
Auto Insurance Added to Indemnity Health Insurance Coverage
Rewards Up to 50 Million Won...Auto Repair Shops Now Included

The Financial Supervisory Service announced on March 24 that it will extend the special reporting and reward period for insurance fraud by seven months and expand the scope of eligible reports to include auto insurance fraud, in addition to the existing coverage for indemnity health insurance fraud.

The Financial Supervisory Service has been operating the special reporting period since January 12, 2026. The original deadline, which was set for March 31, 2026, has now been extended by seven months to October 31, 2026.

The scope of eligible reports has also been expanded. Previously, the focus was on suspected insurance fraud involving indemnity health insurance at clinics and hospitals nationwide—including Korean medicine clinics and hospitals—as well as doctors and brokers (insurance planners). Going forward, the scope will include the auto insurance sector, covering not only indemnity and auto insurance suspected fraud at clinics and hospitals nationwide, but also doctors, auto repair shops (including dent shops), car rental company employees, drivers involved in intentional accidents, and brokers (insurance planners).

The eligible recipients of reward payments have also been expanded. Previously, whistleblowers who were employees at clinics or hospitals could receive up to 50 million won, brokers up to 30 million won, and hospital users such as patients up to 10 million won. From now on, not only brokers who report clinics or hospitals but also auto repair shop (including dent shops) and car rental company employees can receive up to 30 million won. In addition, general whistleblowers such as car owners, drivers, and passengers who are not hospital users will be eligible for up to 10 million won.

The Financial Supervisory Service expects that this expansion of eligible reports and rewards will lead to a decrease in so-called "nylon patient"-type insurance fraud, which has been concentrated around certain Korean medicine hospitals.

In addition to clinics and hospitals, systematic fraudulent activities by auto repair shops and car rental companies are now included as reportable offenses. For example, if someone lures collaborators for intentional car accidents or conspires to file false repair claims, reporting such acts is now eligible for a reward.

To receive a reward, the whistleblower must pass the review by the Korea Life Insurance Association and the General Insurance Association of Korea. The whistleblower must first provide concrete evidence, such as falsified medical records or audio recordings of medical professionals, to substantiate the suspected insurance fraud. If the reported case is deemed credible and leads to an investigation, and the whistleblower actively cooperates through testimony and other means, the reward will be paid. However, rewards will be restricted in cases where there is evidence of pre-arranged or fraudulent reporting intended solely to receive the reward.

An official from the Financial Supervisory Service stated, "For reported insurance fraud cases with highly specific supporting evidence, we plan to respond promptly with swift investigation and requests for official inquiries. We will also work closely with the National Police Agency to ensure that the processes of reporting, investigation request, and investigation are carried out seamlessly."

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