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Article 651-2 of Commercial Act: Effects of Questions in Writing

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Article 651-2 (Effects of Questions in Writing)  

Any fact about which the insurer asks in writing shall be presumed to be material.


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The method of a third person's written consent which is a requirement for validity of life insurance contract which covers the death of a third person

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Supreme Court Judgment 2004Da56677 Delivered on September 22, 2006[Insurance Proceeds][Main Issues]

[1]  The method of a third person's written consent which is a requirement for validity of life insurance contract which covers the death of a third person as an insured event

[2]  Whether the insured's approval of the life insurance contract which covers the death of a third person as an insured event renders the insurance contract valid, where the insurance contract had been concluded without written consent of the insured (negative)

[3] The case holding that it does not violate the principle of trust and good faith for the insurer to argue the nullity of the life insurance contract which covers the death of a third person as an insured event where there was no written consent of the insured, even in the case where the insurer has been receiving the premium for years or has paid the hospitalization payment following the life insurance contract

[Summary of Decision]

[1] The reason w…

Article 651 of Commercial Act: Termination of Contracts due to Breach of Duty of Disclosure

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Article 651 (Termination of Contracts due to Breach of Duty of Disclosure) 

If, at the time of making an insurance contract, a policyholder or the insured, due to bad faith or gross negligence, failed to disclose or misrepresented material facts, the insurer may terminate the contract within one month after it becomes aware of the non-disclosure or misrepresentation or within three years after the contract was made: Provided, That this shall not apply where at the time of making the insurance contract the insurer knew the non-disclosure or misrepresentation or failed to do so due to gross negligence.


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Article 650-2 of Commercial Act: Reinstatement of Insurance Contracts

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Article 650-2 (Reinstatement of Insurance Contracts)  

Where an insurance contract is terminated under Article 650 (2), and no refund for termination is paid, a policyholder may demand a reinstatement of a contract by paying to the insurer delayed premiums, together with the agreed interest within a specified period. The provisions of Article 638-2 shall apply mutatis mutandis to this case.


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Article 650 of Commercial Act: Effects of Payment and Delay in Payment of Premiums

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Article 650 (Effects of Payment and Delay in Payment of Premiums)  

(1)  A policyholder shall pay the whole premium or its first installment without delay after the conclusion of a contract, and if the policyholder fails to pay it, the contract shall be deemed to have been rescinded when two months have lapsed after the contract is made, unless otherwise agreed.

(2)  If premium installments are not paid at an agreed time, the insurer may require the policyholder to pay them within a reasonable period specified, and if he/she fails to do so, the insurer may rescind the contract.

(3)  In cases of a policy effected on behalf of a specified third party, if the policyholder delays the payment of the premiums, the insurer shall not rescind or terminate the contract without requiring the third party to pay it within a reasonable time specified.


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Article 649 of Commercial Act: Voluntary Termination of Contracts Prior to Occurrence of Perils Insured against

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Article 649 (Voluntary Termination of Contracts Prior to Occurrence of Perils Insured against) 

(1)  A policyholder may terminate a contract in whole or in part at any time before a peril insured against occurs: Provided, That in cases of an insurance contract prescribed in Article 639, the policyholder shall not terminate the contract without obtaining the consent of the third party or carrying the insurance policy with him/her.

(2)  In cases of an insurance policy under which the insured amount is not reduced notwithstanding that the insurer has covered the peril insured against, the policyholder may terminate the insurance contract even after the occurrence of the peril insured against.

(3)  In cases falling under paragraph (1), unless otherwise agreed by the parties, the policyholder may demand the return of any unearned premium.


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Article 648 of Commercial Act: Requests for Return of Premiums upon Nullification of Insurance Contracts

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Article 648 (Requests for Return of Premiums upon Nullification of Insurance Contracts)  

Where an insurance contract becomes invalid in whole or in part, if a policyholder and the insured have acted in good faith and without gross negligence, they can demand a return of the insurance premium, in whole or in part. The same shall also apply where the policyholder and the beneficiary have acted in good faith and without gross negligence.


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