[1] Where an insurer concludes an insurance contract in violation of the duty to specify and explain the terms and conditions of the insurance contract, whether it can be asserted as a content of the insurance contract (negative), and where the insurer is exempted from the duty to explain and explain

[2] The case holding that in a case where a policyholder or the insured is obligated to immediately inform the insurer of the contents of the above standardized contract in a case where a two-wheeled automobile is used after entering into an insurance contract under the insurance clause, the insurer cannot be deemed exempted from the duty to specify and explain the above standardized contract since the contents of the above standardized contract cannot be viewed as merely a mere mere mere mere abundance or abundance of what

[1] Article 638-3 (1) of the Commercial Act, Article 3 of the Regulation of Standardized Contracts Act / [2] Articles 638-3 (1) and 652 (1) of the Commercial Act, Article 3 of the Regulation of Standardized Contracts Act

[1] Supreme Court Decision 2003Da7302 decided Apr. 27, 2004 (Gong2004Sang, 875) Supreme Court Decision 2004Da28245 decided Nov. 25, 2004 (Gong2005Sang, 5) Supreme Court Decision 2006Da87453 decided Apr. 27, 2007 (Gong2007Sang, 780)

Dongbu Fire Marine Insurance Co., Ltd. (Law Firm Vindication, Attorneys Jeon Jae-in et al., Counsel for the plaintiff-appellant

Defendant (Law Firm Yang & Yang, Attorneys Kim Jong-hwan et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2009Na32074, 32081 decided October 8, 2009

The judgment below is reversed and the case is remanded to Seoul High Court.

We examine the grounds of appeal.

The court below reasoned that Article 652 (1) of the Commercial Act provides that when the policyholder or the insured becomes aware of the fact that the risk of an accident substantially changes or increases during the insurance period, without delay, the insurer may terminate the insurance contract within one month from the date when the policyholder or the insured becomes aware of such fact. Here, "the fact that the risk of an accident substantially changes or increases" refers to the fact that if the risk exists at the time of conclusion of the insurance contract, the insurer would have not concluded the insurance contract or would not take over the insurance premium at least." The phrase "the case where the two-wheeled automobile is directly used" provided for in the insurance transaction of this case constitutes "the fact that the insurer did not enter into the insurance contract of this case or that at least the insurance premium would not have been subscribed for the insurance contract of this case, the insurer would be subject to duty to notify the Plaintiff of the insurance contract of this case without delay pursuant to the provisions of Article 652 of the Commercial Act as to the insurance contract of this case, and if the policyholder or the insured neglects to do so, the insurer would not have any duty to inform the Plaintiff of the insurance contract of this case.

However, we cannot accept the judgment of the court below for the following reasons.

In general, an insurer and a person engaged in the conclusion or solicitation of insurance contracts shall, upon entering into an insurance contract, specify and explain the important contents of the insurance contract, such as the content of the insurance product, the insurance premium rate system, and changes in the entries in the written application for insurance contract, which are contained in the terms and conditions of insurance. However, the recognition of such duty to explain and explain is based on the fact that the insurance contractor is unable to know the important matters of the terms and conditions while he/she is trying to avoid unexpected disadvantages to the insured. Thus, even if the contents of the terms and conditions are prescribed in the terms and conditions, it is general and common in the transaction, so if the insurance contractor already knows, could have sufficiently predicted, or could have sufficiently predicted, without a separate explanation, those matters already determined by the Acts and subordinate statutes, it is not acknowledged that the insurer has the duty to specify and explain such matters even to the insurer, but if the insurer concludes the insurance contract in violation of such duty to explain and explain, the content of the terms and conditions cannot be asserted as the content of the insurance contract (see, e.g., Supreme Court Decision 2007Da46354.

According to the records, it is difficult to readily conclude that the policyholder and the deceased were sufficiently aware of the contents of the terms and conditions of the contract of this case, and since the provision of injury to the deceased, which is an occupation or duty except driving of a two-wheeled automobile, was applied at the time of the conclusion of the contract of this case, and then the deceased was directly used a two-wheeled automobile, and thus, if the plaintiff did not expressly explain it at the time of the conclusion of the contract, it was difficult for the deceased to anticipate it without delay. Thus, it cannot be deemed that the contents of the terms and conditions of the contract of this case are merely merely a mere mere fact or an incidental degree, and therefore, it cannot be deemed that the plaintiff is exempted from the duty to clarify and explain the terms and conditions of this case

On the contrary, the court below erred by misapprehending the legal principles on the duty of explanation of insurance terms and conditions, which affected the conclusion of the judgment.

The ground of appeal pointing this out is with merit.

3. Conclusion

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yang Chang-soo (Presiding Justice)