An industry insider who provides additional information on insurance frauds can receive a reward; the maximum reward amount is up to 44 million KRW. The Financial Supervisory Service (FSS) encourages active reporting.
Last year, it was reported that 4,000 whistleblowers on insurance fraud received 1.5 billion KRW in rewards. The FSS plans to increase rewards to eradicate insurance fraud.
On the 23rd, the FSS announced that they received a total of 4,452 reports through the ‘Insurance Fraud Report Center’ of both the FSS and insurance companies last year. Of these, over 70%, equating to 3,264 reports, directly contributed to uncovering insurance fraud.
The reported fraudulent claims uncovered totaled 52.1 billion KRW, accounting for 4.5% of the total fraud identified in 2024. The Life and Non-life Insurance Associations and insurance companies paid out 1.52 billion KRW in rewards to whistleblowers who contributed to detecting fraud.
The whistleblower who received the highest reward last year reported a case of a fake hospitalized patient. This patient was discovered to have lent their name as an insurance policyholder to receive treatments like hospitalization and physical therapy, and obtained false documents to fraudulently claim insurance money. The whistleblower received a total reward of 44 million KRW. Most of the cases where rewards exceeding 10 million KRW were paid involved insider reports from within hospitals, with additional rewards for industry insiders being as high as 100%.
The financial authorities plan to expand the scope of reward payments based on the ‘Special Act on Insurance Fraud Prevention.’ Particularly, they plan to offer rewards for acts of solicitation and inducement related to insurance fraud to encourage more reporting.