Auto insurance fraud rises despite tougher penalties

The amount of detected auto insurance fraud has continued to rise each year, reaching 570 billion won ($388 million) last year, despite tougher penalties for organizing or participating in insurance fraud under the amended Special Act on the Prevention of Insurance Fraud, according to the Financial Supervisory Service (FSS), Thursday. Fraudulent claims are increasing the insurance burden on honest policyholders, prompting the FSS to sign a memorandum of understanding with the National Police Agency, the Korea Road Traffic Authority and the General Insurance Association of Korea to enhance collaboration in combating the growing sophistication and organization of insurance fraud. “Auto insurance fraud is on the rise every year, with methods becoming more sophisticated and organized,” FSS Deputy Director Kim Seong-wook said. “To eliminate evolving fraud schemes, it is crucial for relevant agencies to share information efficiently and coordinate joint efforts that utilize each organization’s expertise and infrastructure.” The financial watchdog reported that the total value of det