Korea Post will abolish the ceiling on rewards for reporting crimes such as insurance fraud to encourage reporting.

The Postal Service under the Ministry of Science and ICT said on Sunday it will completely remove the cap on rewards for reporting insurance fraud, previously limited to 30 million won, to encourage reporting and improve detection results.

The reward programme has drawn criticism that a cap limited incentives to report insurance fraud. The Postal Service said it will scrap the ceiling entirely to encourage tips on fraud crimes.

The Postal Service said confirmed Post Office Insurance fraud over the past five years totalled about 4.2 billion won involving 742 people. Of that, fraud amounts based on tips and reports came to about 47 million won, or 1.1 percent of the total. Reward payouts also remained low, totalling 7 cases worth about 3.6 million won, indicating limited public reporting contribution.

The Postal Service has prepared a revision to an internal directive to abolish the cap on reporting rewards. It will scrap the ceiling entirely within the month after an administrative notice period.

Postal Service chief In-hwan Park (박인환) said insurance crime is a serious matter that ultimately leads to higher premiums and harms good-faith subscribers. He said the abolition of the reward ceiling will strengthen a public participation-based monitoring system and improve the soundness of the insurance market.