- Police sent an insurance agency branch operator and 26 organization members to prosecutors, alongside 46 corporate executives and 158 nominee insurance designers.
- The ring generated 73.2 billion won in kickbacks by churning executive term life policies and using ghost companies to dodge 22.9 billion won in taxes.
Seoul Metropolitan Police Agency’s wide-ranging investigation targeted an insurance agency branch operator and 26 accomplices for systematic violations of the Insurance Business Act, breach of trust, and tax evasion, hankyung.com reported on November 11.
The network preyed on corporate leaders by marketing executive term life policies, which are normally purchased by companies to cover key personnel risks.
The primary suspect, who was arrested and sent to prosecutors in September, targeted corporate executives at golf courses and business meetings. The sales pitch promised that corporate funds used to pay high monthly premiums would yield substantial cash returns directed straight to the executives’ personal pockets.
“Tax-free cash with no paper trail, and tax audits won’t touch rebates under 200 million won,” the primary suspect told prospective clients, according to police findings reported by hankyung.com.
For every contract carrying a 10,000,000 won monthly premium, insurance companies paid out roughly 200,000,000 won in acquisition commissions to the brokerage headquarters. The illicit network retained 60,000,000 won for operating expenses while routing 140,000,000 won back to the corporate buyer in monthly installments over 14 months.
Once the recruitment commissions were secured, the organization systematically advised clients to cancel the policies early. Police records show the network utilized ghost companies to execute fraudulent expense filings and secure illicit tax deductions, dodging 22,900,000,000 won in corporate taxes.
| Offense Category | Key Metrics & Figures | Legal Status |
|---|---|---|
| Rebate Volume | 73.2 billion won distributed to 505 executives | Referred to Seoul Central District Prosecutors’ Office |
| Tax Evasion | 22.9 billion won avoided via ghost companies | Under investigation for tax law violations |
| Individual Indictments | 26 organizers, 46 executives, 158 nominee agents | Transferred without detention in late October |
Following a non-prosecution decision on a related arrangement known as Comsurance, many market participants operated under the assumption that insurance rebates escaped criminal liability.
Investigators distinguished the current case from Comsurance, noting that the suspects bypassed internal compliance by using accounts and names of unrelated agents to collect recruitment fees and disburse direct cash to corporate heads, while deliberately sabotaging contracts to harm agency balance sheets.
“Rebate-driven insurance sales and premature cancellations cause cumulative losses for insurers and push up premiums for ordinary policyholders,” a police official told hankyung.com.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
