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ACT ON THE INDEMNIFICATION FOR FIRE-CAUSED LOSS AND THE PURCHASE OF INSURANCE POLICIES

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ACT ON THE INDEMNIFICATION FOR FIRE-CAUSED LOSS AND THE PURCHASE OF INSURANCE POLICIES

Act No. 2482, Feb. 6, 1973

Amended by Act No. 4069, Dec. 31, 1988

Act No. 5258, Jan. 13, 1997

Act No. 5505, Jan. 13, 1998

Act No. 5697, Jan. 29, 1999

Act No. 5982, May 24, 1999

Act No. 6106, Jan. 12, 2000

Act No. 6891, May 29, 2003

Act No. 7186, Mar. 11, 2004

Act No. 8863, Feb. 29, 2008

Article 1 (Purpose)

The purpose of this Act is to contribute to the stabilization of national living by preventing any loss of the human life and property caused by fire, rapidly restoring the disaster and properly compensating any dam- age to the human life.

Article 2 (Definitions)

For the purpose of this Act,

1. the term "non-life insurance company" means a juristic person which has obtained permission for the fire insurance business as prescribed in Article 4 of the Insurance Business Act;

2. the term "fire insurance bearing special agreement on indemnity for physical damage" means an insurance to cover any damage to a building caused by a fire and any liability for loss as prescribed in Article 4 (1); and

3. the term "special building" means State-owned buildings, educational institutions, departments, markets, medical facilities, entertainment places, accommodations, factories, apartment houses, and other buildings as prescribed by Presidential Decree, which many persons enter or leave, or in which many persons work or reside. ACT ON THE INDEMNIFICATION FOR FIRE-CAUSED LOSS AND THE PURCHASE OF INSURANCE POLICIES

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Article 3 (Applicable Area)

The area to which this Act applies shall be determined by Presidential Decree.

Article 4 (Liability of Building Owner for Indemnity) (1) Even though the owner of a special building commits no fault, if another person dies or suffers any injury because of a fire against the building, he shall be liable for compensating for the damage within the limit of the insurance amount as prescribed in Article 8. This provision shall also apply in case where the owner commits a slight fault, regardless of the provisions of the Act on Civil Liability for Fire Caused by Negligence. (2) The indemnity liability of the owner of a special building for damage compensation shall be governed by the provisions of the Civil Act in addition to those of this Act.

Article 5 (Obligation to Effect Insurance)

(1) For the purpose of discharging his liability for damage compensation as prescribed in Article 4 (1), any owner of a special building shall effect a fire insurance bearing special agreement on indemnity for physical damage (hereinafter referred to as the "fire insurance-cum-special agreement") carried on by a non-life insurance company: Provided, That if he has effected the industrial accident compensation insurance for his employees under the Industrial Accident Compensation Insurance Act, he need not effect the insurance covering the liability for damage compensation as prescribed in Article 4 (1) for the employees.

(2) In addition to the fire insurance-cum-special agreement as referred to in paragraph (1), the owner of a special building may effect any insurance covering damage caused by wind or flood disaster or by collapse, etc. (3) No non-life insurance company shall refuse to conclude an insurance contract as referred to in paragraphs (1) and (2). (4) The owner of a special building shall effect the fire insurance- cum-special agreement within thirty days after the building passes the completion test or he acquires its ownership.

(5) The owner of a special building shall renew the fire insurance con- tract-cum-special agreement as referred to in paragraph (1) each year. Article 6 (Special Cases for Building Owned by Foreigner, etc.) The provisions of Articles 4 and 5 shall not apply to the special buildings falling under any of the following subparagraphs: ACT ON THE INDEMNIFICATION FOR FIRE-CAUSED LOSS AND THE PURCHASE OF INSURANCE POLICIES

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1. Buildings owned by ambassadors, ministers and other equivalent envoys of foreign countries dispatched to the Republic of Korea;

2. Buildings owned by organizations of the United Nations and their employees (limited to only foreigners) dispatched to the Republic of Korea;

3. Buildings owned by foreign armed forces stationed in the Republic of Korea; and

4. Buildings for military use and those owned by foreigners which are prescribed by Presidential Decree.

Article 7 (Encouragement of Effecting Insurance)

(1) If a person obliged to effect the insurance as prescribed in Article 5 fails to do so, the Financial Services Commission may request the relevant administrative agency to take necessary measures against the obligor such as the cancellation of approval or permission, the suspension of business or restriction on the use of the building.

(2) The administrative agency shall, upon receiving the request as referred to in paragraph (1), comply with it unless there is any justifiable reason. Article 8 (Amount of Insurance)

(1) The amount of insurance effected under Article 5 shall be any of the following ones:

1. In case of the fire insurance, the amount equivalent to the market price of the special building concerned;

2. In case of death covered under the physical damage liability insurance, the amount as determined by Presidential Decree, which shall be not less than five hundred thousand won for each dead person; and

3. In case of injury covered under the physical damage liability insurance, the amount as determined by Presidential Decree with the limit of the insurance amount for each dead person.

(2) The criterion for determination of the market price as referred to in paragraph (1) 1 shall be determined by Ordinance of the Prime Minister.

Article 9 (Claim for Liability for Amount Insured) Where a liability for damage compensation referred to in Article 4 (1) arises, any victim may make a request to the non-life insurance company ACT ON THE INDEMNIFICATION FOR FIRE-CAUSED LOSS AND THE PURCHASE OF INSURANCE POLICIES

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for the payment of the amount insured as referred to in Article 8 under the conditions as determined by Presidential Decree. Article 10 (Prohibition of Seizure)

The claim for the physical damage liability insurance among insurance claims under this Act may not be seized.

Article 11 (Establishment of Korea Fire Insurance Association) The non-life insurance companies shall establish the Korea Fire Insurance Association (hereinafter referred to as the "Association") which carries out tasks such as safety inspection of fire prevention and fire-fighting equipment, research and enlightenment thereon, etc., upon permission from the Financial Services Commission as prescribed by Presidential Decree.

Article 12 (Legal Personality)

(1) The Association shall be a corporate juristic person. (2) The provisions of the Civil Act concerning the corporate juristic person except for ones prescribed by this Act shall be applicable mutatis mutandis to the Association.

Article 13 (Restriction on Use of Title)

No person other than the Association as prescribed by this Act shall use the title "the Korea Fire Insurance Association", or other similar titles. Article 14 (Contribution)

The non-life insurance companies shall contribute expenses required for the establishment and operation of the Association under the conditions as prescribed by Presidential Decree.

Article 15 (Tasks)

The Association shall conduct the following tasks:

1. Safety inspection of fire prevention and fire-fighting equipment;

2. Assessment of discount grade on premium rate in the fire insurance on the basis of fire-fighting equipment;

3. Survey, research and enlightenment on materials concerning fire pre- vention and fire-fighting equipment;

4. Recommendation to administrative agencies and relevant organizations on the prevention of fire; and

5. Other tasks authorized by the Financial Services Commission. ACT ON THE INDEMNIFICATION FOR FIRE-CAUSED LOSS AND THE PURCHASE OF INSURANCE POLICIES

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Article 16 (Inspection on Safety)

(1) The Association shall conduct a safety inspection of fire prevention and fire-fighting equipment of special buildings whenever insurance contracts are concluded or renewed: Provided, That this shall not apply to any special building on which the safety improvement plan as referred to in Article 13-2 (1) of the High-Pressure Gas Safety Control Act or the process safety report as referred to in Article 49-2 (1) of the Industrial Safety and Health Act shall be made. (2) If it is deemed necessary, the Association may conduct a safety in- spection of fire prevention and fire-fighting equipment for any special building for which a fire insurance-cum-special agreement is effected. In this case, the proviso of paragraph (1) shall apply mutatis mutandis.

(3) Any owner of a special building shall comply with the safety inspection as referred to in paragraphs (1) and (2) unless there is any justifiable reason.

(4) If the owner of a special building fails to comply with a safety inspection as referred to in paragraphs (2) and (3), the Association may request the chief of the fire station to conduct the safety inspection thereof. (5) The Association may, in conducting a safety inspection under par- agraphs (1) and (2), not collect expenses on any pretext. (6) The safety inspection as referred to in paragraphs (1) and (2) shall be conducted under the conditions as prescribed by Presidential Decree. Article 17 (Recommendation on Improvement)

If it is deemed necessary in view of the result of the safety inspection under Article 16, the Association shall recommend the administrative agency concerned to take measures necessary for improving fire-fighting equipment.

Article 18 (Donation, etc. of Fire-Fighting Equipment) (1) The Association may donate fire-fighting equipment to administrative and other relevant organizations, or lend funds required for improving fire-fighting equipment, under the articles of incorporation. (2) Any non-life insurance company or the Association may install a man- ufacturing factory of fire-fighting equipment, or lend necessary funds ACT ON THE INDEMNIFICATION FOR FIRE-CAUSED LOSS AND THE PURCHASE OF INSURANCE POLICIES

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to any person who manufactures such equipment, under the articles of incorporation. Article 19 (Operational Plan)

(1) The Association shall prepare an operational plan of each business year and submit it to the Financial Services Commission before the corresponding year commences. (2) When the Financial Services Commission receives the operational plan as referred to in paragraph (1), it shall notify the Administrator of the National Emergency Management Agency.

(3) The provisions of paragraphs (1) and (2) shall apply mutatis mutandis in case of modifying the operational plan as referred to in paragraph (1). Article 20 (Officers)

(1) A person who is ineligible for election as an officer of an insurer under the provisions of Article 13 of the Insurance Business Act shall not be an officer of the Association.

(2) If any officer who is engaged in routine affairs desires to do other affairs, he shall obtain approval therefor from the Financial Services Commission. (3) If any officer of the Association falls under any of the following subparagraphs, the Financial Services Commission may order the Association to dismiss him:

1. Where he violates this Act, any order issued under this Act or the Association's articles of incorporation;

2. Where he is adjudged guilty for a criminal case;

3. Where he is declared bankrupt;

4. Where he commits an act detrimental to the public interest;

5. Where it is difficult for him to carry out his duties because of any physical or mental disability; and

6. Where causes under paragraph (1) occur or he turns out to have fallen under paragraph (1) at the time of his election.

Article 21 (Supervision)

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(1) If it is deemed necessary for an efficient operation of the Association, the Financial Services Commission may order the Association to modify the Association's articles of incorporation or operational methods, or issue any order necessary for the supervision.

(2) The Administrator of the National Emergency Management Agency may issue any order necessary for the supervision on tasks of subparagraphs 1 and 3 among tasks of the Association prescribed in Article 15. Article 22 (Report and Inspection)

(1) The Financial Services Commission may, if necessary, on a regular basis or at any time, order the Association to submit a report on its activities, or have the Governor of the Financial Services Service inspect operational conditions of the Association, books, documents or other necessary things. (2) The provisions of paragraph (1) shall apply mutatis mutandis in case the Administrator of the National Emergency Management Agency deems it necessary for the tasks of the Association as prescribed in sub- paragraphs 1 and 3 of Article 15.

(3) Any person who conducts the inspection under paragraphs (1) and (2) shall show to the interested persons a certificate indicating his com- petence to do so. Article 23 (Penal Provisions)

Any person who violates the provisions of Article 5 (1) shall be punished by a fine not exceeding five million won.

Article 24 (Fine for Negligence)

Any person who violates the provisions of Article 13 shall be punished by a fine for negligence not exceeding three million won.

Article 25 (Enforcement Decree)

Matters necessary for the enforcement of this Act shall be determined by Presidential Decree.

ADDENDA

(1) (Enforcement Date) This Act shall enter into force on the date of its ACT ON THE INDEMNIFICATION FOR FIRE-CAUSED LOSS AND THE PURCHASE OF INSURANCE POLICIES

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promulgation.

(2) (Transitional Measures) The owners of special buildings who fall under Article 5 at the time this Act enters into force or where time-limit regarding effecting insurance as prescribed in Article 5 arrives between the enforcing date of this Act and June 30, 1974 shall effect the fire insurance-cum special agreement under this Act: Provided, That with respect to any State-owned building, the Minister of Finance may adjust the time of effecting insurance with the limit of the Budget after consulting the Minister of Economic Planning Board.

(3) (Idem) Any non-life insurance company falling under subparagraph 1 of Article 2 at the time this Act enters into force shall establish the Asso- ciation under Article 11 not later than June 30, 1973. ADDENDA

Article 1 (Enforcement Date)

This Act shall enter into force on April 1, 1989. (Proviso Omitted.) Articles 2 through 15 Omitted.

ADDENDUM

This Act shall enter into force on the date of its promulgation. ADDENDA

(1) (Enforcement Date) This Act shall enter into force on April 1, 1998. (Proviso Omitted.)

(2) (Transitional Measures relating to Dispositions) At the time of the entry into force of this Act, authorization or other actions taken by ad- ministrative agencies, or various reports or other actions submitted to ad- ministrative agencies under the previous provisions, shall be deemed to be actions taken by or submitted to administrative agencies under this Act. (3) through (5) Omitted.

ADDENDA

(1) (Enforcement Date) This Act shall enter into force on the date of its promulgation.

(2) (Transitional Measures relating to Officers) The amended provisions of Article 20 shall apply to officers elected on after the date of the entry into force of this Act.

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ADDENDA

Article 1 (Enforcement Date)

This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)

Articles 2 through 6 Omitted.

ADDENDA

(1) (Enforcement Date) This Act shall enter into force three months after the date of its promulgation.

(2) (Transitional Measures relating to Penal Provisions) The application of the penal provisions to any act committed before this Act enters into force shall be governed by the previous provisions. ADDENDA

Article 1 (Enforcement Date)

This Act shall enter into force three months after the date of its prom- ulgation. (Proviso Omitted.)

Articles 2 through 34 Omitted.

ADDENDA

Article 1 (Enforcement Date)

This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)

Articles 2 through 5 Omitted.

ADDENDA

Article 1 (Enforcement Date)

This Act shall enter into force on the date of its promulgation. Articles 2 through 5 Omitted.