N. Korean refugees learn insurance fraud in a hurry

N. Korea isn’t the coolest place to be, even among a lot of North Koreans. That drive to emigrate has created a wave of insurance fraud in South Korea, news-insurances.com reports.

Defectors are so willing to get out that they go thousands of dollars in debt to buy their way across the border. Once in South Korea, they find they lack simple coping skills – like knowing how to buy a subway ticket or use a credit card. Usually, they have to attend a government-sponsored survival skills course just to learn how to make their way through a typical day.

So to defray their debt, many refugees play along in an insurance fraud scheme. The refugee buys health insurance, or joins a government program. Then nefarious doctors or hospital workers issue fake certificates of treatment.

The refugee endorses the certificate, collects “reimbursement,” and splits the proceeds with the doctor or hospital. He passes his share to the broker that arranged his entree to the Free World.

Most refugees don’t know this is fraud, and I guess that makes sense if you’re coming from an economy that barely has its nose above the barter system. So refugees get a two-hour session in insurance fraud as part of their government skills survival course.

I guess I should note that the country of North Korea itself has been accused of brazen insurance fraud. AFP had this cheery discourse a year ago:

Insurance fraud “has become one of the North’s largest illicit revenue generators,” [said former State Department official David] Asher. “The exact scale of the fraud is hard to determine… because the insurance industry has been so gullible.”Several insurers, including Germany’s Allianz Global Investors and Lloyd’s of London, disputed claims by Pyongyang over an alleged 2005 helicopter crash into a government-owned warehouse.

According to court documents cited by the [Washington] Post, the companies claimed that North Korea had faked the crash, that a North Korean court’s decision to uphold the claim was rigged and that Pyongyang often used funds from insurance fraud for Kim’s personal use.

Charming, eh?

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