Hole-in-one insurance agent's license revoked for fraud

(123rf)

A South Korean court recently upheld the state financial watchdog's decision to revoke the license of an insurance salesperson, after he submitted a fraudulent receipt in order to receive benefits for his hole-in-one insurance subscription.

The Seoul Administrative Court ruled against the insurance agent, who challenged the Financial Services Commission's decision to take away his license for insurance fraud.

In November 2014, the plaintiff shot a hole in one at a local golf course that made him eligible for a payout for hole-in-one insurance that he was subscribed to. In Korea, hole-in-one insurance pays out subscribers to celebrate this rare golf feat. In this case, the payout covered costs up to 5 million won ($3,700) for congratulatory gifts, drinks and holding a celebration.

The plaintiff bought 5 million won worth of golf equipment at a local store and submitted the receipt as evidence of his celebratory expenses. But he then returned the purchases immediately after payment, while still receiving the insurance payout.

When this situation was revealed in 2019, the FSC took away his license based on Article 84 of the Insurance Business Act, which prohibits those convicted of insurance fraud from becoming an insurance salesperson.

The plaintiff claimed that he intended to spend the money for a celebration anyway, and that the canceled receipt had merely been submitted to save the trouble of having to submit multiple receipts for every related expense. A police investigation found that he did indeed spend a total of 8 million won in celebratory expenses in one month, which was within the period mandated by the program.

The plaintiff then returned most of the insurance payout to the company in a settlement, and prosecutors decided not to indict him for insurance fraud, on account of the charges being minor and a settlement having been reached.

But the court declined his claims, saying that requesting an insurance payout based on a canceled receipt amounts to active deception of the insurance company.

By Yoon Min-sik(minsikyoon@heraldcorp.com)