[1] Where an insurer violates the duty to clarify and explain the important contents of the insurance contract, whether the insurance contract can be terminated on the ground of a policyholder’s breach of the duty to notify (negative)

[2] Where a policyholder fails to exercise the right to cancel a contract within the period stipulated in Article 638-3(2) of the Commercial Act, whether the breach of the insurer's duty to explain is cured (negative)

[1] In concluding an insurance contract, 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 system of insurance premium rates, changes in the entries in the written subscription for the insurance contract, etc. Therefore, if the insurer concludes the insurance contract in violation of such duty to specify and explain the terms and conditions, it cannot be asserted as the contents of the insurance contract, and even if the policyholder or its agent violated such duty to notify as stipulated in such terms and conditions, the insurance contract may not be terminated for this reason.

[2] When an insurer violates the duty to explain and deliver a standardized contract pursuant to Article 638-3(2) of the Commercial Code, it is apparent in its legal text that the policyholder's right to cancel the contract is not a right given to the policyholder within one month from the date of the formation of the insurance contract. Thus, even if the policyholder did not cancel the insurance contract, the legal effect of the insurer's breach of the duty to explain is extinguished, and thus the policyholder cannot claim the legal effect of the insurer's breach of the duty to explain, or the insurer's breach of the duty

[1] Articles 638-3(1) and 651 of the Commercial Act, Article 3 of the Regulation of Standardized Contracts Act / [2] Articles 638-3(2) and 651 of the Commercial Act

[1] [2] Supreme Court Decision 96Da5520 delivered on April 12, 1996 (1) / [1] Supreme Court Decision 94Da17970 delivered on October 14, 1994 (Gong1994Ha, 2979) Supreme Court Decision 94Da52492 delivered on August 11, 1995 (Gong195Ha, 3121), Supreme Court Decision 95Da53546 delivered on March 8, 1996 (Gong196Sang, 120)

Samsung Fire & Marine Insurance Co., Ltd. (Attorney Gyeong-soo, Counsel for defendant-appellant)

Defendant

Seoul High Court Decision 95Na15683 delivered on December 19, 1995

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

We examine the grounds of appeal.

1. On the first and second grounds for appeal

The insurer and the persons engaged in the conclusion or solicitation of the insurance contract are liable to specify and explain the important contents of the insurance contract, such as the contents of the insurance contract, the insurance premium rate system, and changes in the entries in the written application for the insurance contract, which are contained in the terms and conditions, in conclusion 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, it cannot be asserted as the content of the terms and conditions as the content of the insurance contract. Thus, even if the policyholder or its agent violated the duty to notify as stipulated in the terms and conditions, the insurance contract cannot be terminated for this reason (see, e.g., Supreme Court Decisions 95Da53546, Mar. 8, 1996; 94Da52492, Aug. 11, 1995; 91Da31883, Mar. 10, 1992).

The court below acknowledged the facts, and held that the termination of the insurance contract of this case of the plaintiff on the ground of the defendant's violation of the duty of disclosure as to the main driver, and thus, the plaintiff may cancel the insurance contract of this case according to the terms and conditions, unless there are special circumstances, since the non-party 1, one of his wife, was in violation of the duty of disclosure by falsely notifying the non-party 2 as the main driver even though he was his wife at the time of entering into the insurance contract of this case. Meanwhile, in the conclusion of the insurance contract of this case, the plaintiff did not believe that the contract of this case was made with specific and detailed explanation about the contents of the insurance terms and conditions related to the main driver system, especially in the case of the termination of the contract of this case, and there is no evidence to prove that the plaintiff performed the duty of disclosure and explanation as to the main driver, and therefore, it cannot be viewed that the court below erred in the misapprehension of legal principles as to the effect of the insurer's duty of disclosure and the burden of proof as to the effect of the duty of disclosure.

2. On the third ground for appeal

In accordance with Article 638-3 (2) of the Commercial Act, when the insurer violates the obligation to explain and deliver the terms and conditions, it is clear that the policyholder has the right to cancel the contract within one month from the date of establishment of the insurance contract. Since it is obvious that the policyholder did not cancel the insurance contract, even if the legal effect of the insurer's violation of the obligation to explain is extinguished, and thus the policyholder cannot assert the legal effect of the insurer's violation, or the defect in the insurer's violation of the obligation to explain is not cured. Therefore, the court below rejected the plaintiff's assertion that "In this regard, the court below did not exercise the right to cancel within one month from the date of establishment of the insurance contract in this case because the defendant did not exercise the right to cancel within one month from the date of establishment of the insurance contract in this case, and the defendant cannot oppose the plaintiff with the fact of violation of the obligation to explain."

3. Accordingly, the appeal shall be dismissed and all costs of appeal shall be assessed against the losing plaintiff. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Jong-sik (Presiding Justice)