Whether an insurer may terminate an insurance contract on the ground of a policyholder’s breach of duty of disclosure where the insurer violates the duty of disclosure and explanation on the important contents of the insurance contract (negative)

In conclusion of an insurance contract, the insurer and the persons engaged in the conclusion or solicitation of an insurance contract are obliged to specify and explain the important contents of the insurance contract, such as the content of the insurance contract, the system of premium rates and changes in the terms and conditions of the insurance application, which are contained in the terms and conditions of the insurance contract, and thus, if the insurer concludes the insurance contract in violation of such terms and conditions of the insurance contract, it cannot be asserted as the content of the terms and conditions as the content of the insurance contract. Therefore, even if the policyholder or its agent violated such duty of disclosure as stipulated

Articles 638-3 and 651 of the Commercial Act, Article 3 of the Regulation of Standardized Contracts Act

Supreme Court Decision 95Da53546 delivered on August 11, 1995 (Gong1995Ha, 3121), Supreme Court Decision 96Da4893 delivered on April 12, 1996 (Gong1996Sang, 1220), Supreme Court Decision 96Da4893 delivered on July 30, 1996 (Gong196Sang, 1534)

Hyundai Marine Fire Insurance Co., Ltd. (Attorney Oat-jin, Counsel for defendant-appellee)

Defendant (Attorney Kang-soo et al., Counsel for the defendant-appellant)

Seoul High Court Decision 95Na1400 delivered on September 21, 1995

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

1. The insurer and the persons engaged in the conclusion or solicitation of the insurance contract are obligated to specify and explain the important contents of the insurance contract, such as the content of the insurance contract, the insurance premium rate system, and changes in the terms and conditions of the insurance application, which are contained in the terms and conditions of the insurance contract. Thus, when the insurer concludes the insurance contract in violation of the duty to specify and explain such terms and conditions, the content of the terms and conditions cannot be asserted as the content of the insurance contract. Thus, even if the policyholder or his agent violated the duty to notify under the terms and conditions, the insurance contract cannot be terminated for this reason (see, e.g., Supreme Court Decisions 91Da3183, Mar. 10, 1992; 9Da4893, Apr. 12, 1996; 96Da18106, Jul. 30, 1996).

2. According to the reasoning of the judgment below, the defendant established a distribution company of electronic equipment called Yangyang-si on July 7, 1993, and requested to the non-party 1 to enter into an automobile insurance contract on July 20 of the same month after purchasing (vehicle number omitted), which was recorded the non-party 2 as the insurance premium rate of the non-party 3, the above non-party 2 requested the non-party 3, the head of the university, to enter the above automobile insurance contract as the insurance premium rate of the non-party 4, and the non-party 3 did not know the above vehicle's personal information and the defendant's personal information as to the non-party 3's insurance premium rate of the non-party 4 as the insurance premium rate of the non-party 1, the non-party 2, the agent of the non-party 3, without notifying the non-party 3 of the concept of the driver's license insurance premium rate of the non-party 3, the non-party 3's personal information and the insurance premium rate of the non-party 4.

3. If the facts were as determined by the court below, the non-party 3, the president of the plaintiff company's calendar business office, in entering into the insurance contract of this case, should be deemed that the non-party 2 and the non-party 1, who is the policyholder or his agent, failed to fulfill the duty of disclosure as to the main contents of the insurance contract, as the subject of the duty of disclosure. Thus, in light of the above legal principles, the plaintiff cannot cancel the insurance contract of this case on the ground of the violation of the duty of disclosure

In the same purport, the decision of the court below that the termination of the insurance contract of this case has no validity is just, and there is no error of law in the misapprehension of legal principles as to the duty of explanation as alleged in the ground of appeal

4. Therefore, the appeal is dismissed and all 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.

Justices Lee Im-soo (Presiding Justice)