Law Firm Jinsu, Counsel for the plaintiff-appellant

Attorney Kim Jae-hwan et al.

Attorney Park Sang-young et al., Counsel for the defendant-appellant

The costs of appeal are assessed against the Plaintiff.

1. Review of the reasoning of the lower judgment and the record reveals the following facts.

A. On November 14, 2015, the Plaintiff entered into the instant insurance contract with the Defendant, the insured, the beneficiaries of the residual disability insurance proceeds, and the beneficiaries of the death insurance proceeds, respectively, based on a selective contract that guarantees the payment of the fixed amount of insurance proceeds in the event of injury, death, or disability in the course of a life or death, as a basic contract that guarantees the hospitalization and treatment costs due to injury or disease, and the daily allowances for hospitalization.

B. Although it is possible for the Plaintiff to receive medical treatment for a long time, the Plaintiff was indicted for committing a crime that acquired insurance money, such as a large amount of hospitalization medical expenses, than the insurance money that can be actually paid by eight insurance companies including the Defendant, and was convicted of the judgment, and the judgment became final and conclusive (hereinafter referred to as “related criminal case”). The Defendant filed a lawsuit against the Plaintiff seeking the return of unjust enrichment on the ground of the fraudulent fraud of the insurance money paid during the period in which the public prosecution was instituted in the relevant criminal case, and the judgment became final and conclusive.

D. The Plaintiff filed a claim with the Defendant for the instant insurance money on the ground that the special contract for guaranteeing medical expenses incurred in hospitalization (hereinafter “the instant special contract”) under the instant insurance contract was subject to the payment of insurance money. Of the criminal facts found guilty in the relevant criminal case, the amount obtained by the Plaintiff from the Defendant is equivalent to 11,045,855 won in total.

E. On July 27, 2018, the Defendant notified the Plaintiff of the termination of the instant insurance contract based on Article 14(1)1 and 3 of the General Terms and Conditions of the instant insurance contract, and Articles 653 and 659 of the Commercial Act, on the ground that the Defendant was found guilty in the relevant criminal case.

F. Article 14(1) of the General Terms and Conditions of the instant insurance contract provides that no compensation shall be made for any damage caused by the insured or the contractor’s intentional act, and Paragraph (2) provides that the contract may be terminated upon occurrence of such cause. Article 2(1) and (2) of the General Terms and Conditions of the instant Special Terms and Conditions are identical to Article 2 of the General Terms and Conditions of the instant Special Terms and Conditions.

2. Whether the termination of the instant insurance contract is lawful

A. An insurance contract is a continuous contract that exists during the insurance period as well as a continuous contract that remains in existence for a long time, and is likely to cause moral hazard, and thus requires strong trust between the parties. Therefore, if the fiduciary relationship, which forms the basis of the contract, is destroyed due to a party’s unfair act, etc. during the existence of the insurance contract, and the existence of the contract is not expected due to a serious reason, the other party may terminate the contract to the future by terminating it.

In a case where the policyholder claimed or paid the insurance money for the cause of the payment of the hospitalized treatment, but it is found that the whole or part of the hospitalized treatment is unnecessary, the insurer may terminate the insurance contract if the insurance contract is deemed to have been destroyed due to the policyholder’s improper claim for the insurance money or the receipt of the insurance money, and if it is deemed that there exists a serious reason that the existence of the insurance contract cannot be expected to continue, in full view of various circumstances, such as the background leading up to the hospitalized treatment, whether the hospitalized patient was aware of the absence of the necessity of the hospitalized treatment, the number of days of hospitalization without the necessity of the hospitalized treatment, claim for or receipt of the insurance money, frequency of receipt of the insurance money, circumstances relating to other insurance contract to which

On the other hand, such termination right is based on Article 2 of the Civil Act that provides for the principle of trust and good faith and is naturally premised on an insurance contract relationship. Thus, it cannot be deemed that the insurer has a duty to explain in advance to the insurer, or the insurer’s exercise of such termination right violates Article 663 of the Commercial Act or Article 9 subparag. 2 of the Regulation of Standardized Contracts Act. The insurer’s exercise of such termination right cannot be deemed as a violation of the principle of trust and good faith under an insurance contract solely on the ground that the insurer did not disclose that it failed to meet the payment requirements at the stage of examining the payment of insurance proceeds. However, such termination right is not specified in the insurance contract, and it is not clear whether there is any ground for termination in a specific case, and it is not clear whether the insurer has any ground for termination or not, considering that the insurer’s refusal of the unfair claim for insurance proceeds or refund of the insurance proceeds, it may be an excessive disadvantage

B. The lower court determined as follows.

Of the instant insurance contract, the insurance accident under the instant special agreement refers to “the subject of hospital treatment due to disease,” and if the Plaintiff was hospitalized in a way that leads to exaggeration or symptoms even though it was a disease for which hospital treatment was possible, it constitutes “the insured under Article 14(1) of the General Terms and Conditions of the instant insurance contract,” and “the case where the policyholder intentionally causes the insurance accident.” As such, the instant insurance contract falls under a cause for the Defendant to cancel the insurance contract pursuant to Article 14(2) of the General Terms and Conditions, and thus, was lawfully terminated by notifying termination pursuant to Article 14(1) and (2)

In addition, a continuous contract, such as the instant insurance contract, may be terminated if it is difficult for the other party to maintain the trust relationship as it is destroyed and kept. The instant termination notice may also be deemed to have expressed his/her intent of termination on the ground that the Defendant destroyed the trust relationship. Even if not, the contract was lawfully terminated at the time when the Defendant delivered the Plaintiff the statement of reasons for appeal containing his/her intent to terminate the instant insurance contract due to the destruction of trust relationship.

C. We examine the judgment of the court below in light of the legal principles as seen earlier. Article 14(1) and (2) of the General Terms and Conditions of the instant insurance contract purport that the insurance contract may be terminated in cases where the insured et al. intentionally caused the disease, etc. and caused medical expenses to be incurred after receiving hospital treatment. Since the Plaintiff’s fraudulent and excessive hospitalization actually occurred while the hospital was hospitalized in the absence of the need to be hospitalized, it does not constitute grounds for termination under the said special terms and conditions. Furthermore, since the Defendant paid the pertinent insurance money in accordance with the instant special agreement, Article 2(2) of the Special Terms and Conditions of the instant special agreement applies to the grounds for termination. The Defendant erred by applying Article 14(2) of the General Terms and Conditions

However, considering the following circumstances: (a) the amount of unfair payment insurance money related to the claim of this case; and (b) the progress of the relevant criminal case, etc., the Plaintiff’s claim for insurance money is destroyed the trust relationship that forms the basis of the insurance contract of this case; and (c) can be recognized as having serious grounds for not expecting the continuation of the insurance contract. Therefore, the termination notice of this case includes the intent of termination based on the damage to the trust relationship; (b) even if not, the lower court’s conclusion that the instant insurance contract was lawfully terminated at the time when the appellate brief of this case containing the Defendant’s intent of termination based on the damage to the trust relationship reaches the Plaintiff is justifiable; and (c) insofar as the termination based on the damage to the trust relationship is recognized, the lower court did not exhaust all necessary deliberations as shown in

3. Scope of termination.

A. As seen earlier, an insurance contract requires a strong fiduciary relationship between the parties due to the nature that is sufficiently required of the party’s ethical and good faith. Therefore, in a case where an insurance contract is destroyed due to a party’s unfair act and the other party terminates the contract, if an unfair act by the party that destroys the fiduciary relationship is related to a special agreement that is not a main contract of the relevant insurance contract, even if such act is serious and thus, it cannot be expected that the entire insurance contract should be maintained due to its significant impact, barring special circumstances, the effect of termination shall be deemed to affect the entire insurance contract.

B. The lower court determined that the instant insurance contract was entirely terminated as indicated in its holding. Examining the reasoning of the lower judgment in light of the relevant legal doctrine and the record, the lower court did not err by misapprehending the legal doctrine on the scope of termination as

4. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Chief Justice Park Sang-ok

Justices Noh Jeong-chul