A study on regulations “authority of insurance agency, etc.” of Article 646-2 of Commercial Act
Because of the fact that insurance salesmen and insurance agencies engage in mediation and represents for insurance contracts by directly meeting insurance policy holders in the process of insurance sales, they have been trusted as being considered as one party of the insurance contracts in reality. In other words, there has been an issue raised, which the salesmen and agencies have been misunderstood or confused as insurance companies or insurance agency and insurance mediation agency have been confused each other. In particular, from the perspective of insurance holder, he or she cannot clearly appreciate the relationship between an insurance procurement assistant and an insurer and the authorities of insurance procurement assistants. In addition, there has been a notion that insurance policy holders think insurance procurement assistants as a cause of increasing in-perfect sales contracts, resulting in loss for them. Despite the importance of their roles of insurance salesmen and agencies supporting successful insurance contracts made between insurance policy holders and insurers, Insurance Contract Act does not have any clauses on authorities, etc.; but Insurance Business Act has only definitions of glossaries. To solve such issues, industry insiders, academics in the insurance act, the Ministry of Justice, a competent authority, and the National Assembly have engaged in-depth consultation so as to pass the revised bill on Insurance Chapter of Commercial Act on Feb. 20th, 2014.
The passage of the bill, in itself, after long consultation might be meaningful since the revision initiated in 2007 by the Government; but the views on the bill are diverse depending on their interests. Many people raised the issue that the passed bill for Insurance Chapter of Commercial Act focuses on protection of insurance policy holders rather than being loyal to insurance principles. The intention of revisers, however, lies in the protection of insurance policy holders. In this vein, authority-related clauses for insurance agencies might have room for improvement. Therefore, this Study categorizes insurance agencies into insurance contract agencies and insurance mediation agencies; and proposes to input glossaries of insurance salesman in the bill. In addition, insurance mediation agencies are similar with insurance salesman as they engage in “mediation” like insurance salesman; but insurance mediation agencies can act as an independent dealer, so that this Study proposes the authority scope of them as including rights for insurance payment taking, insurance policy publishing and notification and acceptance. In addition, this Study proposes to admit the proxy right of insurance contract making when insurance mediation agencies do not explain the rights to insurance policy holders. Pursuant to rights of insurance salesman, there is a claim to admit the right for notification and acceptance regardless of the proxy right for contract making; it is decided as being needed for additional consultation due to a lack of professionalism and risk for fraud with insurance policy holders.