(a) Whether Article 650 of the Commercial Act applies where an insurance contract is naturally invalidated due to the expiration of a grace period for the payment of premiums;

(b) Whether the insurer is liable for any accident that occurred before the insurance premium is received after the expiration of the insurance premium payment grace period.

A. Article 650 of the Commercial Act provides for the requirement of termination in a case where an insurer’s unilateral declaration of intent on the ground of unpaid payment of an insurance premium is cancelled, and there is no room for its application in a case where the insurer’s declaration of intent is not required to wait for the termination, and the insurance contract is naturally invalidated due to the lapse of the premium payment grace period.

B. For the commitment of an insurance contract, if the policyholder pays unpaid premiums even after the termination of the insurance contract even after the termination of the insurance contract due to the failure of the policyholder to pay the premiums by the expiration of the payment grace period, but in such case, if the insurer agreed not to compensate for any accidents caused by the 6 p.m. of the unpaid premiums from the time the insurance contract becomes invalidated until the 6 p.m. of the receipt date of the unpaid premiums, the insurer is not liable to pay the unpaid premiums for accidents caused by the failure to do so after the expiration of the payment grace

(b)Article 650(b) of the Commercial Act;

Plaintiff

[Defendant-Appellant] Korea Automobile Insurance Co., Ltd.

Daegu High Court Decision 86Na909 delivered on November 25, 1986

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

1. Judgment on the ground of appeal No. 1

According to the reasoning of the judgment below, the court below confirmed that the plaintiff and the defendant entered into the insurance contract of this case, and the second insurance premium shall be paid in installments on August 4, 1984; the second insurance premium shall be paid in installments on October 4 of the same year; and the third insurance premium shall be paid in installments on October 4 of the same year; and when the second insurance premium payment after the expiration of the grace period, the above insurance contract shall become null and void as a matter of course from 6 p.m. of the date when the grace period expires; and the plaintiff shall not pay the third insurance premium until the expiration of the grace period until October 26, 1984; and the insurance contract of this case shall be determined by the records that the insurance contract of this case has already become null and void at October 6, 1984.

The issue is that the above agreement on the cancellation of an insurance contract is in conflict with Article 650 of the Commercial Act and is unfavorable to the plaintiff who is a policyholder. Thus, the validity cannot be acknowledged by Article 663 of the Commercial Act. However, Article 650 of the Commercial Act provides for the requirement of termination in a case where an insurer terminates an insurance contract with one-time declaration of intent on the grounds of unpaid insurance premium, and it is not necessary to wait for the insurer's declaration of intention as a matter of course due to the expiration of the insurance premium grace period. Therefore, there is no room for its application.

2. Judgment on the second ground for appeal

Under the terms and conditions of the insurance contract of this case, "if the policyholder claims the restoration of the insurance contract and pays the unpaid premium within 30 days after the termination of the insurance contract, the insurance contract shall continue to be effective, but in such case no compensation shall be made for any accident occurred not later than 6 p.m. from the date when the insurance contract was terminated until the date when the unpaid premium was received." As long as the plaintiff concluded the insurance contract of this case in accordance with the terms and conditions of the contract of this case, it is clear that the defendant cannot be held liable for the payment of the insurance money for the accident of this case which occurred before the unpaid premium was received after the expiration of the payment grace period, even though there was no objection from the plaintiff after the expiration of the payment grace period. The judgment below

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

Justices Lee B-soo (Presiding Justice)