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A Study on the Breach of Duty of Disclosure and Fraudulent Insurance Contracts

  • Journal of Insurance and Finance
  • 2015, 26(1), pp.3-50
  • Publisher : Korea Insurance Research Institute
  • Research Area : Social Science > Business Management

Seongwan Kim 1

1손해보험협회

Accredited

ABSTRACT

The insurance contract is concluded on the basis of good faith and required for higher utmost good faith than good faith required in ordinary civil contract. Therefore, the insurers decide to accept the insurance based on information, which was offered from the insured or policyholder, and the insurers gain a basic information for indemnity calculation amount supplied from them. However, insurance contracts are difficult to exist, if the insured and policyholder take advantage of insurance with malicious intent. There is no gainsaying that insurance contracts intrinsically stir up the passion of gambling. So the insured or policyholder are not free from temptation of gaining unjust compensation by insurance. Especially, duty of disclosure is important system between the insurer and the insured in insurance contracts; however, most of people misuse and misunderstand duty of disclosure for gaining compensation by the back door. Therefore, I think that we cannot eradicate fraudulent insurance contracts, derived from moral hazard of insurance system by depending on conscience of the insured or policyholder. For this reason, this article suggests that fraudulent insurance contracts need to be canceled, because it is no reason to protect fraudulent insurance contracts when the contracts was made by fraud intention of the insured or policyholder. Thus, this article, first of all, went into the prerequisite and effect of breach of duty of disclosure, secondly, kept an eye out for relationship between breach of duty of disclosure of policyholder, insurance planner and insurance agent, etc., and fraudulent insurance contracts, and lastly, searched contents of fraudulent insurance contracts of Amendments of the Commercial Law that is proposed by government in 2008, but it is discarded by expiration. And then this article is intended to suggest that the need for the amendment of the Commercial Law to protect sound social order and sustain of trade order.

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