[1] Details of the duty to specify and explain the insurance terms and conditions that the insurer bears / Where the insurer is exempted from the duty to specify and explain the insurance terms and conditions / Whether the insurer may claim the content of the terms and conditions as the content of the insurance contract where the insurer concludes the insurance contract in violation of the duty to explain and explain

[2] The case holding that the court below erred in the misapprehension of legal principles in holding that Byung company's duty to explain and explain to Byung company is not acknowledged, in case where Gap company's main insured of Eul and Eul company as Eul company as Eul insured and Eul company as Eul insured and Byung insurance company as Eul company, "if the insured company becomes to change its occupation or duty after entering into an insurance contract and then changed its occupation or duty, the policyholder or the insured company must notify Byung company without delay."

[3] The case holding that the court below erred in the misapprehension of legal principle in holding that Byung company may terminate the insurance contract on the ground that Eul company may terminate its duty of notification on the ground that it violated the duty of notification, in case where Gap formed an insurance contract with Eul as Eul's principal insured and Eul as Eul's secondary insured, but Eul was engaged in a type of business such as broadcasting equipment leasing, and Eul was involved in driving a truck and Eul terminated the insurance contract on the ground of Eul's violation

[1] Generally, an insurer and a person engaged in the conclusion or solicitation of an insurance contract shall, when entering into an insurance contract, have the duty 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 entries in the written subscription, which are specified in the terms and conditions of the insurance contract. However, the recognition of such duty to explain and explain is based on the fact that the insurance contractor is not aware of the important matters of the terms and conditions while she is trying to avoid unexpected disadvantages to the insurance contractor. Thus, even if the terms and conditions are prescribed in the terms and conditions of the contract, 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, the contents of the terms and conditions, and if the insurance contract was concluded in violation of such duty to explain and explain, it cannot be asserted as the content of the terms and conditions of the insurance contract.

[2] The case holding that the court below erred in the misapprehension of legal principles as to the duty to specify and explain insurance terms and conditions, where Gap's main insured of Eul and Eul as Eul's subordinate insured, and Byung's insurance company as Eul's subordinate insured and Byung's subordinate insurance company, where Byung company becomes liable to explain and explain terms and conditions of "if the insured company becomes an occupation or duty after the conclusion of the insurance contract and then its occupation or duty is changed, the policyholder or the insured shall without delay be notified to Byung company Byung," which appears to fall under the important contents of the insurance contract to be specified and explained by the insurer, since Article 652 (1) of the Commercial Act and Article 653 of the Commercial Act stipulate individual reasons for "the risk of an accident is significantly changed or increased," and thus, Article 652 (1) or 653 of the Commercial Act cannot be viewed as simply resumed or subsumed, but otherwise, it did not recognize Byung's duty to explain and explain to Byung company.

[3] The case holding that in a case where Gap concluded an insurance contract with Eul as Eul's principal insured and Eul's first level university student Eul as Eul's principal insured and Eul's first level university student, and thereafter Eul's insurance contract was terminated on the ground of violation of Eul's duty to notify, the judgment below erred in the misapprehension of legal principles as to the duty to notify under Article 652 (1) of the Commercial Act, on the ground that Byung's insurance contract was concluded, Byung's company was aware that Eul or Eul was subject to duty to notify when it entered into the insurance contract, and since it was hard to predict that the type of business, such as the rental of broadcasting equipment, etc., was employed after graduation by general university students in light of social norms, or that the type of business, such as the rental of broadcasting equipment, etc., was significantly changed or increased significantly due to a change in occupation, Byung's insurance contract can be terminated on the ground of violation of duty to notify.

[1] Article 638-3 (1) of the Commercial Act, Article 3 of the Regulation of Standardized Contracts Act / [2] Articles 638-3 (1), 652 (1), and 653 of the Commercial Act / [3] Article 652 (1) of the Commercial Act

[1] Supreme Court Decision 2009Da91316, 91323 Decided March 25, 2010

Plaintiff (Attorney Lee Chang-soo, Counsel for the plaintiff-appellant)

Hyundai Marine Fire Insurance Co., Ltd. (Attorney Park Sung-won et al., Counsel for the plaintiff-appellant)

Daegu District Court Decision 2013Na300589 Decided November 13, 2013

The judgment below is reversed, and the case is remanded to the Daegu District Court Panel Division.

The grounds of appeal are examined.

1. As to the grounds of appeal on the duty to clarify and explain the terms and conditions

A. The court below determined that Article 25 of the insurance clause of this case (hereinafter “the insurance clause of this case”) of the purport that “if the insured becomes to change his occupation or duty after entering into an insurance contract, the policyholder or the insured shall, without delay, inform the defendant of the change without delay, and if the insured fails to perform his duty of notification, the defendant shall notify that the insurance money will be paid in reduction within one month from the time when he became aware of the fact, and the reduced insurance premium will be paid,” falls under Article 652 of the Commercial Act that Article 25 of the insurance clause of this case (hereinafter “the insurance clause of this case”) of the insurance clause of this case where the duty of notification already set forth in Article 652 of the Commercial Act is applicable to a case where

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

In general, the insurer and the persons engaged in the conclusion or solicitation of insurance contracts have the duty 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 application for insurance contract, etc., which are contained in the terms and conditions of insurance to policyholders or the insured in the conclusion of the insurance contract. However, the recognition of such duty to explain and explain is based on the fact that the insurance contractor does not know the important matters of the terms and conditions while she is trying to avoid unexpected disadvantages to the policyholders due to the terms and conditions of the contract. Thus, even if the contents of the terms and conditions are prescribed in the terms and conditions, it is common and common in the transaction, so if the insurance contractor already knows or could have sufficiently predicted without any separate explanation, or if it is merely a degree that the contents already determined by the Acts and subordinate statutes are repeated or delayed, it cannot be asserted as the contents of the terms and conditions in the insurance contract (see, e.g., Supreme Court Decision 209Da13136, Mar. 25, 2010).

The terms and conditions of the instant contract are related to the structure of insurance premium rates and the changes in the entries in the written subscription for insurance, and are deemed to fall under the important contents of the insurance contract that must be specified and explained by the insurer. Moreover, the terms and conditions of the instant contract are individually and individually provided for in Articles 652(1) and 653 of the Commercial Act in cases where “the risk of an accident” is significantly changed or increased. Therefore, the provisions of Article 652(1) or 653 of the Commercial Act cannot be said to be simply resumed or subsumed.

In examining the record, there is no evidence suggesting that the plaintiff or the non-party, who is the policyholder, was well aware of the contents of the terms and conditions of the contract of this case, or that the plaintiff or the non-party, who is the insured, was concluded on the premise that the occupation of the non-party, who is the insured, was a university student, and thus, the occupation of the non-party was changed to the category of business, such as the lending of broadcasting equipment, and thus, it could have been anticipated that the non-party would promptly notify the defendant of the fact that the risk of the accident was significantly increased. Accordingly, when concluding the contract of

Nevertheless, solely on the grounds stated in its reasoning, the lower court determined that the Defendant did not have the duty to specify and explain the terms and conditions of the instant contract. In so doing, the lower court erred by misapprehending the legal doctrine on the duty to explain and explain the terms and conditions of the insurance contract, thereby affecting the conclusion of the judgment

2. As to the ground of appeal on the duty to notify under Article 652(1) of the Commercial Act

A. Article 652(1) of the Commercial Act provides, “When a policyholder or the insured becomes aware of a significant change or increase in the risk of an accident during the insurance period, he/she shall, without delay, notify the insurer of the fact.” Here, “the fact that the risk of an accident is significantly changed or increased” refers to the fact that, if the risk of an accident exists at the time of the conclusion of the insurance contract, the insurer would not conclude the contract or at least be deemed to have not taken over the insurance premium (see, e.g., Supreme Court Decisions 95Da25268, Sept. 5, 1997; 2003Da18494, Jun. 11, 2004; 2003Da18494, Jun. 11, 2004) that the term “when the risk of an accident is clearly changed or increased” means that the change in a specific condition related to the risk of an accident is insufficient, and that the change in its condition would not constitute a substantial change or increase in the risk

B. Based on its adopted evidence, the court below acknowledged the following facts: (a) around December 12, 2006, the Plaintiff entered into the instant insurance contract with the Defendant and the principal insured as the Nonparty; (b) the Nonparty entered into an application for the instant insurance contract with the Plaintiff and the principal insured as the Nonparty, stating that the Nonparty’s occupation was a university student and the vocational water supply was class 1; (c) the Nonparty was engaged in the type of business such as lending of broadcast equipment at class 2 vocational water supply; and (d) caused the instant insurance accident while driving a truck in order to perform its business; and (e) determined the insurance contract as to whether to accept the insurance and the insurance premium rate depending on the change of the insured’s occupation where the occupation and duties were changed from the university student’s status that the insured did not engage in a special business to the employees of the service business, such as lending of broadcasting equipment, etc.; and (e) determined that the change of the occupation constitutes a case where the insurer did not enter into an insurance contract or at least its insurance premium, and thus, constitutes the Nonparty’s notification or the Nonparty’s duty of change.

C. However, even if examining the record, the Defendant knew that the Plaintiff or the Nonparty was subject to the duty of notification at the time of entering into the instant insurance contract, or that the type of business, such as the provision of broadcasting equipment, is difficult to expect the Plaintiff or the Nonparty to be employed after graduation from the university students in light of social norms, or that the type of business, such as the provision of broadcasting equipment, is an occupation involving high risk, and there is no evidence suggesting that the Plaintiff or the Nonparty knew that the risk of the occurrence of the accident is significantly changed or increased due to the change of the occupation. Thus, even if the Plaintiff or the Nonparty did not notify the change of the occupation, the Defendant cannot terminate the instant insurance contract on the ground of the violation of such duty of notification.

Nevertheless, solely on the grounds stated in its reasoning, the lower court determined that the Defendant may terminate the insurance contract of this case on the grounds of violating the duty to notify the Plaintiff or Nonparty. In so doing, the lower court erred by misapprehending the legal doctrine on the duty to notify under Article 652(1) of the Commercial Act, thereby failing to exhaust all necessary deliberations, thereby adversely affecting the conclusion of the judgment. The allegation in the grounds of appeal

3. Conclusion

Therefore, without further proceeding to decide on the remaining grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim So-young (Presiding Justice)