Special Act on Prevention of Insurance Fraud | A Client Who Escaped the Risk of Insurance Fraud Punishment, 'Not Booking the Case'

The client who inquired about the Special Act on Prevention of Insurance Fraud was suffering from Parkinson's disease and had difficulty communicating directly, so the client came to this law firm together with the client's mother and requested a consultation.

The client had been diagnosed with Parkinson's disease at a hospital about 15 years earlier and subscribed to accident and illness insurance in the year following the diagnosis.

At the time, the insurance planner proceeded with the subscription at a rapid pace and gave guidance to the effect that there was "no problem," and the contract was in fact concluded normally.

However, the insurance company recently raised, all of a sudden, a violation of the duty of disclosure prior to the contract and reported the client on the charge of violating the Special Act on Prevention of Insurance Fraud.

After listening to the account of the client and the client's mother, the attorney kept in mind that, in determining insurance fraud, the key criterion is whether 'there was an intent to commit insurance fraud from the outset,' and placed emphasis on the statements made at the early stage of the investigation.

The attorney established a response strategy focused on the point that the client had no intent to commit insurance fraud.

In particular, the attorney comprehensively organized the circumstances of the insurance subscription, the state of the client's health at the time, and the content of the planner's explanation, and emphasized that the client could not be a subject of punishment under the Special Act on Prevention of Insurance Fraud.

After examining the defense counsel's written opinion and materials, the investigative agency determined that it was difficult to recognize a violation of the Special Act on Prevention of Insurance Fraud and processed the matter as 'not booking the case' on the ground of no suspicion of crime.

Not booking the case means a disposition in which the police conclude a case at the stage before booking, after the case has been received.

Unlike a non-referral decision, in which a suspect is booked and investigated and then, upon a determination that there is no suspicion, the case is not referred to the prosecution, in the case of not booking the case no investigation is conducted with the status of a suspect, and the matter is not formally registered as a criminal case.

Because the criminal procedure itself did not begin, the matter was concluded with a swift closing process.

The client is currently in a condition of being hospitalized at a convalescent hospital after receiving a disability determination, and the point that the client has neither the ability nor the intent to defraud insurance proceeds was also taken into account.

As the case was concluded with not booking the case, the client was able to escape the risk of criminal punishment.

In insurance fraud cases, the mere raising of an issue by the insurance company may, if not adequately addressed, lead to criminal proceedings, so particular caution is required.

The content of the disclosure at the time of the insurance subscription, the consultation process, and whether the planner provided guidance all become important factors in the determination.

In a situation where punishment for insurance fraud is feared, rather than responding alone, it is more important than anything else to receive the assistance of an attorney from the early stages and to respond strategically.

Daeryun, the ninth-ranked law firm in the Republic of Korea (based on the 2025 National Tax Service value-added tax filings), on the basis of its experience with various cases related to insurance fraud, presents solutions suited to each client's situation.

If you have been implicated in a case related to insurance fraud, as in the client's case, please consult with a professional through a 🔗legal consultation reservation.