Article 1(Purpose) #
The purpose of this Act is to protect the rights and interests of policy holders, the insured and other interested persons by prescribing matters necessary for investigations, prevention, and punishment of insurance fraud, thus contributing to promoting the insurance industry in a sound manner and to improving the welfare of citizens.
Article 2(Definitions) #
The terms used in this Act shall be defined as follows:
1. The term "insurance fraud" means claiming for insurance money by deceiving an insurer with regard to the occurrence, causes or details of insurance risk;
2. The term "insurance company" means any person who engages in the insurance business after obtaining a license prescribed in Article 4 of the Insurance Business Act.
Article 3(Relations with other statutes) #
With regard to investigations or prevention of insurance fraud or punishment of persons who commit insurance fraud, this Act shall apply in preference to other statutes.
Article 4(Reports on insurance fraud) #
Where any reasonable ground exists for suspecting policy holders of an insurance contract, the insured, a person who is expected to receive insurance money or other interested persons (hereinafter referred to as "policy holders, etc.") of engaging in insurance fraud with regard to an insurance contract or payment of insurance money, an insurance company may report thereon to the Financial Services Commission.
Article 5(Protection of policy holders) #
(1) Insurance companies should endeavor to ensure that they do not infringe on the personal information of policy holders, etc. in the process of investigating insurance accidents.
(2) No insurance company shall delay or refuse payment of insurance money or reduce the amount of insurance money during the payment process, on grounds of investigations on insurance accidents without any reason prescribed by Presidential Decree.
Article 5-2(Prohibition of solicitation or inducement of insurance fraud) #
No person shall induce, entice, solicit, or advertise insurance fraud.
[This Article Added on Feb. 13, 2024]
Article 5-3(Request for data) #
(1) The Financial Services Commission may request the provision of materials necessary for the investigation of insurance fraud from relevant administrative agencies, insurance companies, and other agencies or organizations as prescribed by Presidential Decree for the efficient investigation of insurance fraud. In such cases, the types and scope of materials that may be requested shall be prescribed by Presidential Decree.
(2) The Financial Services Commission may request the submission of necessary data from information and communication service providers (referring to information and communication service providers as defined in Article 2 (1) 3 of the Act on Promotion of Information and Communications Network Utilization and Information Protection, etc.; the same shall apply hereinafter) in order to investigate violations of Article 5-2. In such cases, the types and scope of data that may be requested shall be prescribed by Presidential Decree.
(3) A person requested to provide or submit materials under paragraphs (1) and (2) shall comply with such request unless there is good cause.
(4) The Financial Services Commission shall not use the data provided and submitted pursuant to paragraphs (1) and (2) for any purpose other than the purpose for which it was provided and submitted.
(5) Where the Financial Services Commission discovers an act violating Article 5-2, it may request the Korea Media and Communications Commission under Article 18 of the Act on the Establishment and Operation of Korea Media and Communications Commission to deliberate and make a request for correction pursuant to subparagraph 4 of Article 22 of that Act. <Amended on Oct. 1, 2025>
[This Article Added on Feb. 13, 2024]
Article 6(Notification to investigative agencies) #
(1) Where any reasonable ground exists to suspect acts of policy holders as insurance fraud, the Financial Services Commission, the Financial Supervisory Service or insurance companies shall report thereon to a competent investigative agency, request such agency to conduct an investigation, or take other necessary matters.
(2) Where a report or a request for investigation is made to a competent investigative agency pursuant to paragraph (1), data concerning the relevant insurance accident shall be submitted to the investigative agencies.
Article 7(Requesting review on propriety of hospitalization by investigative agencies) #
(1) Where investigative agencies deem that review shall be conducted on whether hospitalization of policy holders, etc. is appropriate (hereinafter referred to as "propriety of hospitalization") for investigations of insurance fraud, they may request the Health Insurance Review & Assessment Service prescribed in Article 62 of the National Health Insurance Act (hereinafter referred to as "Health Insurance Review & Assessment Service") to conduct the review.
(2) Where the Health Insurance Review & Assessment Service receives a request pursuant to paragraph (1), it shall review the propriety of hospitalization of policy holders, etc. and notify the results thereof to the investigative agencies.
(3) The Health Insurance Review and Assessment Service shall establish standards for the systematic review of the propriety of hospitalization as prescribed by Presidential Decree. In such cases, the Service shall consult in advance with investigative agencies or other persons prescribed by Presidential Decree. <Added on Feb. 13, 2024>
Article 7-2(Obligation to notify damage from automobile insurance fraud) #
Where an insurance company confirms the fact that insurance premiums for automobile insurance (referring to automobile insurance under Article 4 (1) 2 (c) of the Insurance Business Act) have been unfairly increased due to an insurance fraudulent act related to an accident involving a motor vehicle (referring to a motor vehicle defined in subparagraph 1 of Article 2 of the Compulsory Motor Vehicle Liability Security Act Guarantee of Automobile Accident Compensation Act).
[This Article Added on Feb. 13, 2024]
Article 8(Insurance fraud crime) #
(1) Any of the following persons shall be punished by imprisonment with labor for not more than 10 years, or by a fine not exceeding 500 million won:
1. Any person who has acquired insurance money or helped a third party to acquire insurance money;
2. No person shall induce, entice, solicit, or advertise insurance fraud in violation of Article 5-2.
(2) Penalty of imprisonment with labor and fines pursuant to paragraph (1) 1 may be concurrently imposed.
[This Article Wholly Amended on Feb. 13, 2024]
Article 9(Habitual offenders) #
Any person who habitually commits a crime prescribed in Article 8 shall be punished by aggravating the penalty by up to one half of the penalty specified for the crime committed.
Article 10(Attempts) #
Attempts to commit a crime of Articles 8 and 9 shall be punished.
Article 11(Aggravated punishment of insurance fraud crime) #
(1) Any person who commits a crime prescribed in Article 8 or 9 shall be subject to aggravated punishment where he or she has acquired or has helped a third party acquire at least 500 million won of insurance money (hereafter referred to as "profits from insurance fraud" in this Article) as follows:
1. Where profits from insurance fraud are at least five billion won: Life imprisonment or imprisonment of at least five years;
2. Where profits from insurance fraud are at least 500 million won and not more than 5 billion won: Imprisonment for a limited term of at least three years.
(2) In cases falling under paragraph (1), fines corresponding to profits from insurance fraud or less may be concurrently imposed.
Article 12(Duty of confidentiality) #
No person who engages or engaged in investigations into insurance fraud shall provide or divulge information or data he or she has acquired in the course of performing his or her duties to a third party or use it for purposes other than purposes of performing his or her duty.
Article 13(Delegation of authority) #
The Financial Services Commission may partially delegate the authority pursuant to this Act to the Governor of the Financial Supervisory Service, as prescribed by Presidential Decree, when necessary.
Article 14(Penalty provisions) #
Any person who provides or divulges information or data he or she has acquired in the course of performing his or her duty to a third party, in violation of Article 12, or who uses it for purposes other than its intended purposes, shall be punished by imprisonment of not more than three years or a fine not exceeding 30 million won.
Article 15(Administrative fines) #
(1) Any of the following persons shall be punished by an administrative fine of not more than 10 million won: <Amended on Feb. 13, 2024>
1. Any insurance company which delays or refuses the payment of insurance money, in violation of Article 5 (2), or reduces the amount of insurance money paid;
2. A provider of information and communications services who fails to submit data without good cause or submits false data in violation of Article 5-3 (3).
(2) Administrative fines under paragraph (1) shall be imposed and collected by the Financial Services Commission, as prescribed by Presidential Decree.
Article 16(Provisions applicable mutatis mutandis) #
With regard to any person who has been punished for violation of Article 11, Article 14 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes shall apply mutatis mutandis.