Non-Life Insurers Refund KRW 1.36 Billion to 2,289 Auto Insurance Fraud Victims Last Year

Last year, non-life insurance companies refunded a total of KRW 136 million in unfairly surcharged auto insurance premiums to 2,289 victims of insurance fraud. This amounts to an average of about KRW 600,000 per person.

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According to the Financial Supervisory Service on April 20, since the refund system was introduced in June 2009, non-life insurers have refunded a total of KRW 1.12 billion to approximately 24,000 victims of auto insurance fraud. Looking at the past five years, an average of 2,540 victims received about KRW 121 million in refunded surcharged premiums each year.

The Financial Supervisory Service promoted a plan last year to manage long-term unclaimed surcharged premiums more systematically and efficiently by converting those amounts into dormant insurance funds and contributing them to the Korea Inclusive Finance Agency. For unclaimed surcharged premiums of over KRW 8.7 million that have not been claimed for more than 10 years, each insurance company will notify the victims, and starting next month, the funds will be contributed to the agency sequentially each year. As a result, victims of auto insurance fraud can receive their surcharged premium refunds through the insurance company before the contribution, and through the Korea Inclusive Finance Agency after the contribution.

When a case of insurance fraud is confirmed, non-life insurance companies inform consumers of the damages and the refund procedure. However, there are cases where the refund process does not proceed due to reasons such as changes in contact information or refusal to receive notifications.

To address this, the Korea Insurance Development Institute operates the 'Integrated Inquiry Service for Excess Auto Insurance Premiums,' which allows consumers to directly check if they are victims of insurance fraud and apply for a refund. However, the Institute recently warned that voice phishing cases impersonating insurance refund notifications have occurred, urging people not to provide personal information over the phone to those claiming to be from an 'insurance refund support organization.'

The Financial Supervisory Service stated it will continue efforts to ensure that surcharged premiums are promptly refunded to victims of auto insurance fraud, and that victims receive thorough relief.

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