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.
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; |
| Article 3 (Relations with other Acts) |
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 Acts.
| Article 4 (Reports, etc. 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, etc.) |
| (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 6 (Notification to Investigative Agencies, etc.) |
| (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. |
| Article 8 (Insurance Fraud Crime) |
Any person who has acquired insurance money or helped a third party to acquire insurance money shall be punished by imprisonment of not more than ten years or a fine not exceeding 50 million won.
| 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.
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/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 not more than |
profits from insurance fraud may be imposed concurrently.
| Article 12 (Duty of Confidentiality) |
No person who engages or engaged in investigations into insurance fraud shall provide or divulge information or data he/she has acquired in the course of performing his/her duties to a third party or use it for purposes other than purposes of performing his/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 (Penal Provisions) |
Any person who provides or divulges information or data he/she has acquired in the course of performing his/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 (Fines for Negligence) |
| (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 shall be punished by fines for negligence not exceeding ten million won. |
| (2) | Fines for negligence prescribed in paragraph (1) shall be imposed and collected by the Financial Services Commission, as prescribed by Presidential Decree. |
| Article 16 (Provisions Applicable Mutatis Mutandis) |
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Transitional Measures concerning Penal Provisions, etc.)
Penal provisions concerning acts committed before this Act enters into force and application of fines for negligence shall be governed by the previous provisions.