Discussions on insurance fraud and insurance crime, without a clear distinction, may bring problems of criminal litigation against normal insurance contractors. Therefore, it is necessary to foremost define the meaning of insurance fraud and insurance crime. In particular, the objective of protection in the case of insurance fraud is not the protection of personal property but the one of public interest which is the wider concept. For this reason, the problem of insurance fraud should not be dealt under the criminal law. Furthermore, only shall the case of insurance fraud, which includes criminal nature, be categorized as insurance crime; thus, in fact, insurance fraud can be a wider concept than insurance crime. Where an insurance contractor has an intention of fraud, it can be an insurance fraud under the commercial law. However, this practice itself cannot be an insurance crime, and there is no ground to treat insurance fraud as insurance crime. Moreover, treating it as insurance crime can impose insurance contractors disadvantage when they face particular issues. Hence, this subject should be examined very carefully. The problem of insurance fraud generally comes from moral hazard or lack of sense of guilty, but there is also a possibility of abetting fraud or an opportunity of fraud due to the systemic problem. From the stage of contracting to the stage of collecting insurance, it is possible that environmental factors, which come from the irrational and unprofessional management, can influence insurance fraud. Of course, personal intention of insurance fraud is a problem of this issue, but external factors that can allow fraud are more problematic. In particular, the system for protecting insurance contractors, the so-called insurance consumers, can encourage adverse selection of insurance contractors, and thus, objective and rational yardstick is crucial. Besides, special attentions are necessary in the verification stage of insurance accident for preventing insurance fraud. For example, in order to ensure factual evidence or to prevent fabricating evidence in car accidents, verification should be made by the public authority or police. Like the systems in other jurisdictions, police should verify the car accident evidence for insurance claims. In addition, it is necessary for the public authority to control insurance companies when insurance agents take part in the process of collecting insurance for insurance contractors, thereby facilitating insurance fraud. Considering investigative power of the Financial Supervisory Service with regards to fraud, it should be recognised after securing independence and impartiality. The fundamental issue in insurance fraud is consciousness of the problem. Bearing in mind that historically insurance fraud originated from the birth of insurance system, we can tell the problem of insurance fraud comes from negative human nature, which is an intrinsic difficulty. To conclude, it is necessary to educate the objectives of insurance policy to the public and make them understand the harms from fraud.