CONTENTS
- 1. Insurance Fraud Act Litigation, What Are the Detailed Circumstances?
- - Insurance Fraud Act Litigation, What Are the Relevant Statutes?
- 2. Insurance Fraud Act Litigation, What Was the Lower Court's Determination?
- 3. Insurance Fraud Act Litigation, What Was the Appellate Court's Determination?
- 4. Insurance Fraud Act Litigation, What Was Daeryun's Strategy?
1. Insurance Fraud Act Litigation, What Are the Detailed Circumstances?
The son of A, who was insured under OO Insurance, was riding an electric kickboard when he fell on the road, sustaining injuries including a skull fracture, and received hospital treatment.
However, A, in conspiracy with insurance solicitors, falsely recorded the cause of the son's injury as "injured by falling," and claimed the insurance proceeds while omitting the emergency initial examination chart, thereby obtaining insurance proceeds of 2,740,000 won from the insurer.
However, the terms of the OO Insurance policy that A's son had subscribed to provided that the insured must give notice if the insured comes to use a two-wheeled motor vehicle or the like on a continuing basis, and that where the direct cause of the event giving rise to the payment of insurance proceeds is a sudden and accidental external injury arising while operating a two-wheeled motor vehicle the insurance proceeds shall not be paid.
Accordingly, A was indicted on the charge that A obtained insurance proceeds from OO Insurance Company through 🔗an act of insurance fraud.
Insurance Fraud Act Litigation, What Are the Relevant Statutes?
▣ Special Act on Prevention of Insurance Fraud
Article 1 (Purpose)
The purpose of this Act is to protect the rights and interests of policyholders, the insured, and other interested parties, and to contribute to the sound development of the insurance business and to the promotion of the welfare of the people, by providing for matters concerning the investigation, prevention, and punishment of acts of insurance fraud.
Article 2 (Definitions)
1. The term "act of insurance fraud" means an act of claiming insurance proceeds by deceiving the insurer as to the occurrence, cause, or content of an insured event.
Article 8 (Insurance Fraud)
(1) A person who falls under any of the following subparagraphs shall be punished by imprisonment for not more than 10 years or by a fine not exceeding 50 million won.
1. A person who, through an act of insurance fraud, obtains insurance proceeds or has a third party obtain insurance proceeds
2. A person who, in violation of Article 5-2, arranges, induces, solicits, or advertises an act of insurance fraud
(2) In the case of subparagraph 1 of paragraph (1), imprisonment and a fine may be imposed concurrently.
2. Insurance Fraud Act Litigation, What Was the Lower Court's Determination?
The lower court that heard the litigation related to the Insurance Fraud Act found A guilty, holding that the act of claiming insurance proceeds by falsely recording the cause of the injury and deliberately omitting the emergency initial examination chart constituted a deceptive act that is difficult to tolerate under generally accepted social norms.
By contrast, A appealed, arguing that because this case does not fall under the grounds for restriction of insurance payment set forth in the insurance terms, even though A recorded the cause of the injury simply as "injured by falling" rather than as "injured by falling while riding an electric kickboard," this could not be regarded as a deceptive act.
3. Insurance Fraud Act Litigation, What Was the Appellate Court's Determination?
The appellate court in charge of the litigation related to the Insurance Fraud Act held that the evidence submitted by the prosecutor alone was insufficient to prove beyond a reasonable doubt that A had deceived the victim company, and found A not guilty.
The special terms set forth in the OO Insurance policy provided only that "no insurance proceeds shall be paid for an accident occurring while the insured operates a 'two-wheeled motor vehicle,'" and the insurer did not explain to the insured that no insurance proceeds would be paid for an accident occurring while operating an 'electric kickboard' either.
Accordingly, the court determined that the insured had no obligation to notify the insurer of the fact that the insured was using an 'electric kickboard.'
For this reason, the court reversed the judgment of the first instance and found A not guilty.
4. Insurance Fraud Act Litigation, What Was Daeryun's Strategy?
We have analyzed a District Court judgment that, in connection with the Insurance Fraud Act, found the defendant not guilty on the ground that the insurer had not explained the insurance terms in detail, even though the defendant had obtained insurance proceeds by recording false facts.
Recently, as the number of users of personal mobility devices, including electric kickboards, has rapidly increased, the rate of related traffic accidents has also been rising.
As a result, cases in which insurers decline to pay insurance proceeds on the ground that the duty of disclosure was breached with respect to claims for electric kickboard accidents are becoming more frequent.
This is because, when most people come to continuously use an electric kickboard or an electric skateboard after entering into an insurance contract, they have a duty to notify the insurance company of this fact, yet the majority are unaware of it.
Because this is a key issue in the payment of insurance proceeds, if you are experiencing difficulties in this regard, you may wish to consult with an attorney experienced in such matters in order to receive appropriate compensation.
At the 🔗Criminal Group of Daeryun Law Firm LLP, attorneys with extensive experience in insurance fraud litigation provide clients with well-considered responses.
If you are involved in a charge of insurance fraud and face the risk of punishment, you are welcome to entrust your case at any time to the attorneys handling insurance fraud matters of Daeryun Law Firm.
