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Laws of the Republic of Korea |
1
INSURANCE BUSINESS ACT
Wholly Amended by Act No. 6891, May 29, 2003
Amended by Act No. 7379, Jan. 27, 2005
Act No. 7428, Mar. 31, 2005
Act No. 7971, Aug. 29, 2006
Act No. 8386, Apr. 27, 2007
Act No. 8520, Jul. 19, 2007
Act No. 8572, Aug. 3, 2007
Act No. 8852, Feb. 29, 2008
Act No. 8863, Feb. 29, 2008
Act No. 8902, Mar. 14, 2008
CHAPTER GENERAL PROVISIONS
Article 1 (Purpose)
The purpose of this Act is to contribute to the sound development of insurance business and the balanced development of the national economy through the solid operations of insurers and the protection of rights and interests of policy holders, the insured and interested persons. Article 2 (Definitions)
The definitions of terms used in this Act are as follows: 1. The term "insurance business" means the business of receiving money
from the insured in return for promising the payment of agreed
benefits
to the insured for their life or death and for indemnifying damage resulting
from any accident, etc. for the insured,
and such insurance business
is categorized into life insurance business, the business of insurance
against loss and the third insurance
business;
2. The term "life insurance business" means the business of receiving
money from the insured in return for promising the payment
of agreed
benefits to the insured for their life or death;
3. The term "business of insurance against loss" means the business of
receiving money from the insured in return for promising the
indemnity
of loss caused by any accident for the insured (excluding any disease,
any injury and any nursing provided for in subparagraph
4) (including
the business of receiving remuneration from any debtor and any obligator
INSURANCE BUSINESS ACT
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in return for promising them to indemnify damage suffered by any
creditor and any claimant to be liable for the fulfillment of liabilities
incurred by any trade, any employment, any contract or the fulfillment
of obligations in accordance with Acts and subordinate statutes);
4. The term "third insurance business" means the business of receiving
money from the insured in return for promising the payment
of agreed
benefits to the insured for any disease, any injury and any nursing
thereof or for indemnifying damage caused by such
disease, such injury
and such nursing for the insured;
5. The term "insurance company" means any person who runs the in-
surance business after obtaining a license provided for in the
pro-
visons of Article 4;
6. The term "mutual company" means a company incorporated pursu-
ant to this Act for the purpose of running the insurance business
with its policy holders being its members;
7. The term "foreign insurance company" means any insurance company
incorporated by any person for the purpose of running the insurance
business in a country other than the Republic of Korea in accordance
with Acts and subordinate statutes of such country;
8. The term "insurance solicitor" means any person who is engaged in
the business of brokering the conclusion of insurance contracts
for
his insurance company (including any incorporate body and any foun-
dation, either of which is not a corporation) after having
him reg-
istered in accordance with the provisions of Article 84;
9. The term "insurance agency" means any person who is engaged in the
business of concluding insurance contracts on behalf of his
insur-
ance company (including any incorporate body and any foundation,
either of which is not a corporation) after having him
registered in
accordance with the provisions of Article 87;
10. The term "certified insurance broker" means any person who is in-
dependently engaged in the business of brokering the conclusion
of
insurance contracts (including any incorporate body and any foun-
dation, either of which is not a corporation) after having
him regis-
tered in accordance with Article 89;
11. The term "solicitation" means the act of brokering the conclusion of
insurance contracts for any insurance company or concluding
insur-
ance contracts on behalf of any insurance company;
INSURANCE BUSINESS ACT
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12. The term "credit extension" means loaning or the purchase of secu-
rities (limited to the purchase of securities in the nature
of financial
support) and direct and indirect financial transactions involving credit
risk of insurance companies, which are all
prescribed by the Financial
Services Commission under the conditions as prescribed by Presidential
Decree and insurance companies;
13. The term "total assets" means the assets obtained by excluding the
assets, including undepreciated new contract expenses and
business
right, etc., prescribed by the Presidential Decree, from the assets in-
dicated on the balance sheet;
14. The terms "equity capital" means paid-in capital, capital surplus,
earned surplus and others equivalent thereto (excluding any
recap-
italization) that are obtained by subtracting the aggregate amount of
items, including business rights, and others equivalent
thereto
prescribed by Presidential Decree from the aggregate amount of items
prescribed by Presidential Decree;
15. The term "same borrower" means the same individual or the same
corporation and any person who shares credit risk with the former,
who are each prescribed by Presidential Decree;
16. The term "large shareholder" means a shareholder falling under any
of the following items:
(a) Majority shareholder: a person himself, where he and a person
specially related to him (hereinafter referred to as a"specially
related
person") as prescribed by Presidential Decree, hold the greatest
number of voting shares of an insurance company, after
summing
up the total number of stocks they own, no matter whose name
the accounts stand in; or
(b) Principal shareholder: a person who holds 10/100 or more of the
total number of voting shares of an insurance company on his
own
no matter whose name the accounts stand in, or a person prescribed
by Presidential Decree among shareholders who exercise de
facto
influence on the main matters of management, such as appointment
or dismissal of officers, etc. of the insurance company;
and
17. The term "subsidiary" means any other company in the case that any
insurance company holds a stake in excess of 15/100 of the
total
number of voting shares (including equity shares) issued by such
company.
INSURANCE BUSINESS ACT
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Article 3 (Conclusion of Insurance Contracts)
No one shall conclude any insurance contract with any person who is not
an insurance company, broker the conclusion of any insurance
contract
or act on behalf of any insurance company: Provided, That the same shall
not apply to the case where Presidential Decree
prescribes.
CHAPTER LICENSE OF INSURANCE
BUSINESS, ETC.
Article 4 (License for Insurance Business)
(1) Any person who intends to run the insurance business shall obtain
a license from the Financial Services Commission according
to the types
of insurance business, which are each prescribed in the following
subparagraphs: 1. The types of the life insurance business:
(a) Life insurance;
(b) Pension insurance (including retirement insurance); and
(c) Other types of insurance business, which are prescribed by
Presidential
Decree;
2. The types of the business of insurance against loss:
(a) Fire insurance;
(b) Maritime insurance (including air transportation insurance);
(c) Automobile insurance;
(d) Guaranty insurance;
(e) Reinsurance; and
(f) Other types of insurance business, which are prescribed by
Presidential Decree; and
3. The types of the third insurance business:
(a) Injury insurance;
(b) Disease insurance;
(c) Nursing insurance; and
(d) Other types of insurance business, which are prescribed by
Presidential Decree.
(2) Any person who has obtained a license on whole types of the life insurance
business or the business of insurance against loss
referred to in paragraph
(1) shall be deemed to have obtained the license on whole types of the
third insurance business.
INSURANCE BUSINESS ACT
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(3) Any person who is entitled to obtain a license for the insurance busi-
ness shall be limited to any stock company, any mutual
company and
any foreign insurer, and the branch office in the Republic of Korea of
any foreign insurer, which obtains a license
for the insurance business
under paragraph (1), (hereinafter referred to as the "local branch office
of foreign insurer") shall
be deemed an insurance company incorporated
pursuant to this Act.
(4) The Financial Services Commission may lay down terms to the license
referred to in paragraph (1). 1. The articles of incorporation;
2. The business plan for three years after the commencement of the
insurance business (including the estimated financial statement);
3. The business operating manual by the type of insurance business
intended to run, insurance clauses and methods of calculating
insur-
ance premiums and the liability reserve (hereinafter referred to as
the "basic document"); and
4. Documents prescribed by Presidential Decree other than the documents
referred to in subparagraphs 1 through 3.
Article 6 (Requirements for License, etc.)
(1) Any person who intends to obtain a license for his insurance business
(excluding any foreign insurer) shall meet the requirements
falling under
each of the following subparagraphs: 1. He is required to hold the capital or the fund provided for in the pro-
visions of Article 9 (1) and (2);
2. He is required to be able to protect policy holders and have physical
facilities, including data-processing facilities and professional
man-
power, which are adequate to run his insurance business;
3. His business plan is required to be appropriate and sound; and
4. Large shareholders (including a shareholder who is a specially related
INSURANCE BUSINESS ACT
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person to the majority shareholder; hereafter the same shall apply
in this Article) prescribed by Presidential Decree are required
not to
fall under any of the subparagraphs of Article 13 (1) and to have full
equity-investment abilities and sound financial standings
with no
history of disrupting the sound economic order.
(2) Any foreign insurer that intends to obtain a license for the insur-
ance business shall meet requirements falling under each
of the following
subparagraphs:
1. It is required to hold the business fund provided for in the provisions
of Article 9 (3);
2. It is required to run the insurance business abroad in accordance with
foreign Acts and subordinate statutes, which is the same
as the in-
surance business it intends to run in the Republic of Korea;
3. It is required to hold assets and have the sound financial standing
as well as the business soundness, which are internationally
recog-
nized as adequate for it to run the insurance business in the Republic
of Korea; and
4. It is required to meet the requirements referred to in paragraph (1) 2
and 3.
(3) Every insurance company shall keep the requirement referred to in
paragraph (1) 2 fulfilled under the conditions as prescribed
by Presidential
Decree even after it obtains a license for the insurance business: Provided,
That the same shall not apply to the
case where any insurance company
fails to keep such requirements fulfilled for the purpose of ensuring the
soundness of its management
and protecting the interests of policy holders,
etc. after obtaining approval from the Financial Services Commission under
the
conditions as prescribed by Presidential Decree.
(4) Any person who intends to be a large shareholder (excluding a per-
son prescribed by Presidential Decree) after acquiring stocks
of any in-
surance company shall meet from among the requirements prescribed by
Presidential Decree for sound management from among,
and shall obtain
prior approval from the Financial Services Commission.
7
(6) Any person who has acquired any share without obtaining approval
in accordance with paragraph (4) shall be prohibited from exercising
his
voting right on such share.
(7) Necessary matters concerning detailed requirements for license,
approval and order referred to in paragraphs (1) through (5)
shall be
prescribed by Presidential Decree.
Article 7 (Preliminary License)
(1) Any person who intends to apply for a license (hereafter in this Ar-
ticle referred to as "principal license") in accordance
with the provisions
of Article 4 may apply to the Financial Services Commission for a preliminary
license in advance.
(3) The Financial Services Commission may lay down terms to any
preliminary license referred to in paragraph (2).
(4) When any person who has been granted a preliminary license files
an application for a principal license after fulfilling the
terms laid down
to the preliminary license, the Financial Services Commission shall grant
him such principal license.
(1) Every insurance company shall indicate principal types of the insur-
ance business that it runs in its company name or title.
(2) Any person who is not an insurance company shall be prohibited from
using any letter indicating insurance company in his company
name or
title.
Article 9 (Capital or Fund)
(1) Every insurance company may commence its insurance business only
after it makes a payment of not less than 30 billion won in
capital or
INSURANCE BUSINESS ACT
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fund: Provided, That in the case that any insurance company intends
to run part of the types of the insurance business provided
for in the pro-
visions of Article 4 (1), the amount of the capital or the fund may be
otherwise prescribed by Presidential Decree
within the amount of not less
than 5 billion won.
(2) Notwithstanding the provisions of paragraph (1), any insurance
company that solicits people to enter into insurance contracts
using
communications means such as telephone, mail and computer commu-
nications under the conditions as prescribed by Presidential
Decree may
commence its insurance business after it pays an amount equivalent to
not less than two thirds of the capital or the
fund required under para-
graph (1).
(3) In the case that any foreign insurer intends to run the insurance
business in the Republic of Korea, its business fund prescribed
by the
Presidential Decree shall be deemed the capital or the fund required under
paragraph (1) or (2).
Article 10 (Prohibition on Concurrent Operation of Insurance Business)
Every insurance company shall be prohibited from concurrently
running
the life insurance business and the business of insurance against loss:
Provided, That the same shall not apply to the
types of the insurance
business, which fall under any of the following subparagraphs:
1. The reinsurance of the life insurance business and the reinsurance
of the third insurance business;
2. The types of the insurance business, which are prescribed by Presidential
Decree and allowed to be concurrently run in accordance
with other
Acts and subordinate statutes; and
3. Any insurance that is added to the types of the third insurance in
accordance with the standards set by Presidential Decree.
Article 11 (Prohibition on Concurrent Operation of Other Business)
(1) Every insurance company shall be prohibited from running
any business
other than the insurance business with the exception of the business falling
under each of the following subparagraphs:
1. The financial business that is prescribed by Presidential Decree and
is allowed to be run by every insurance company in accordance
with
relevant Acts and subordinate statutes;
2. The financial business that is prescribed by Presidential Decree and
INSURANCE BUSINESS ACT
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authorized by the Financial Services Commission as possible for every
insurance company to run it concurrently;
3. The business that falls under each of the following subparagraphs
and is prescribed by Presidential Decree as incidental business:
(a) The business related to the insurance business (including the
business of brokering or vicariously brokering transactions be-
longing to the insurance business for other insurance company);
(b) The business of exploiting manpower, assets or facilities and
equipment in possession of any insurance company; and
(c) The business, for which it is not required to obtain any license,
authorization,
approval or registration, etc. under other Acts and
subordinate statutes.
(2) Any insurance company shall, if it intends to run any business other
than the insurance business in accordance with paragraph
(1), perform
the accounting of such other business separately from the insurance
business under the conditions as prescribed by
Presidential Decree.
Article 12 (Opening of Local Offices, in Republic of Korea by Foreign
Insurers, etc.)
(1) Any foreign insurer or any person who is running the business of in-
surance subrogation, insurance brokerage and other insurance-related
business abroad (hereinafter referred to as "foreign insurer, etc.") may
open its or his office in the Republic of Korea (hereinafter
referred to as
"local office") for the purpose of surveying the insurance market, gath-
ering information and performing other
work similar thereto.
(2) Every local office shall be prohibited from performing the act falling
under each of the following subparagraphs:
1. The act of running the insurance business;
2. The act of brokering or vicariously brokering the conclusion of insur-
ance contracts; and
3. The act that is prescribed by Presidential Decree as being in con-
travention of the purpose of opening the local office.
(3)
Every local office shall use the letter office in its name.
(4) The Financial Services Commission may, when any local office violates
any disposition taken or any order given under this Act, order such local
office to suspend its business for the fixed term of
at least six months
or shut down such local office.
10
CHAPTER INSURANCE COMPANY
SECTION 1 Officers and Employees
Article 13 (Qualifications for Officers)
(1) Any person falling under any of the following subparagraphs shall
be disqualified as an officer of any insurance company (referring
to any
director, any auditor or any person who is prescribed by Presidential Decree
as being equal to such officer; hereafter in
this Chapter, Article 76 (3)
and subparagraph 2 of Article 130 the same shall apply): 1. A minor, an incompetent or quasi-incompetent person;
2. A person who was declared bankrupt and who has yet to be reinstated;
3. A person who has been sentenced to imprisonment without prison
labor or to a heavier punishment, and five years have yet passed
since
the expiration of the term of sentence, or since the decision to exempt
such sentence has been made (including a case that
the execution of
such sentence is deemed terminated);
4. A person who has been sentenced to a fine or a heavier punishment
under this Act, foreign Acts and subordinate statutes equivalent
thereto
and finance-related Acts prescribed by Presidential Decree and for whom
five years have yet to expire from the date on
which the execution
of such sentence was terminated or exempted (including the case that
the execution of such sentence is deemed
terminated);
5. A person who is in a stay period after having been sentenced to a
stay of the execution of the imprisonment without prison labor
or a
heavier punishment;
6. A person who has worked as an officer or an employee for a company
or a corporation, whose business authorization and license,
etc. have
been revoked in accordance with this Act or finance-related Acts
prescribed by Presidential Decree, and for whom five
years have yet
to expire from the date on which such business authorization and license,
etc. were revoked (limited to any person
who is prescribed by Presidential
Decree as directly responsible for incurring the grounds of revoking
such authorization and license,
etc.);
7. A person who is working or has worked as an officer or an employee
for a financial institution (referring to the financial institution
pro-
vided for in subparagraph 1 of Article 2 of the Act on the Structural
Improvement of the Financial Industry) that has been
subject to timely
INSURANCE BUSINESS ACT
11
corrective measures taken by the Financial Services Commission in
accordance with the provisions of Article 10 (1) of the same Act
or
an administrative disposition, including a decision, which is taken and
made by the Financial Services Commission, to transfer
insurance
contracts in accordance with the provisions of Article 14 (2) of the
same Act (hereinafter referred to as "timely corrective
measures, etc."),
and two years have yet passed since the date on which such financial
institution was subjected to the timely
corrective measures, etc. (limited
to any person who is prescribed by Presidential Decree as directly
responsible for incurring
the grounds of ordering such timely corrective
measures, etc.);
8. A person who has been dismissed or dismissed after facing a disci-
plinary action in accordance with this Act, foreign Acts and
subor-
dinate statues corresponding this Act and finance-related Acts pre-
scribed by Presidential Decree and for whom five years
have yet to
expire from the date on which he was dismissed or dismissed after
facing such disciplinary action; and
9. A retired officer or a resigned employee, who has been served a notice
that if the retired officer or the resigned employee still
works on as
an officer or an employee, he would have been dismissed or dismissed
after facing a disciplinary action in accordance
with Article 135 or
finance-related Acts prescribed by Presidential Decree and for whom
five years have yet to expire from the
date on which he was served
such notice (in the case that five years from the date on which he
was served the notice exceed seven
years from the date on which he
retired or resigned, the number of years shall be made seven years
from the date on which he retired
or resigned).
(2) Officer of every insurance company shall be persons who are not feared
to undermine the public interests and the sound management
of the
insurance business and disrupt the order of transactions.
(3) Specific matters concerning qualification requirements for
officers
referred to in paragraph (2) may be prescribed by Presidential Decree.
(4) In the case that any person who is selected
and appointed as an officer
of any insurance company falls under each subparagraph of paragraph (1)
or is found to fall under each
subparagraph of paragraph (1) at the time
of his selection and appointment, he shall be rightly dismissed.
(5) Any act performed
by any officer prior to his dismissal under para-
graph (4) shall not lose its effect.
INSURANCE BUSINESS ACT
12
Article 14 (Prohibition on Officers Holding Concurrent Offices)
Every standing officer of insurance companies shall be prohibited
from
concurrently working as a managing director for other profit-making
corporation: Provided, That the same shall not apply to
the case falling
under each of the following subparagraphs:
1. Where he becomes an officer or an employer of a financial holding
company incorporated pursuant to the Financial Holding Companies
Act, which runs an insurance company as a subsidiary;
2. Where he is selected and appointed as a receiver under the Debtor
Rehabilitation and Bankruptcy Act;
3. Where he becomes an officer or an employer of any subsidiary (ex-
cluding the case prescribed by Presidential Decree); and
4. Where he is prescribed by Presidential Decree as not being feared to
be in conflict of interest with policy holders.
Article 15 (Selection and Appointment, etc. of Outside Directors)
(1) Every insurance company (limited to insurance companies prescribed
by Presidential Decree in light of their assets, etc.; hereafter in this Ar-
ticle the same shall apply) shall have not less than
three directors (herein-
after referred to as "outside directors") who are not engaged in the reg-
ular duties at the board of
directors and do not fall under any of the
subparagraphs of paragraph (4), and the number of outside directors
shall exceed a half
of the total number of directors.
(2) Every insurance company shall set up a committee with the mandate
to recommend candidates for outside directors in accordance
with the
provisions of Article 393-2 of the Commercial Act (hereinafter referred
to as the "outside director candidate recommendation
committee"). In
this case, the number of outside directors shall make up not less than
half of the number of the total members
of the outside director candi-
date recommendation committee.
(4) A person who falls under any of the following subparagraphs shall
not be an outside director of an insurance company, and an
outside di-
INSURANCE BUSINESS ACT
13
rector shall lose his position when he comes to fall thereunder:
1. A minor, incompetent or quasi-incompetent;
2. A person who was sentenced bankrupt and has not been reinstated;
3. A person who was sentenced imprisonment without labor or heavier
punishment and for whom 2 years have not passed since the execu-
tion of such sentence was completed or the exemption of the execu-
tion of such sentence was made definite;
4. A person for whom 2 years have not passed after he was dismissed
or removed from the office pursuant to this Act;
5. Large shareholders of the insurance company;
6. A person who is or has been a full-time officer or an employee of the
insurance company or an affiliated company thereof (referring
to an
affiliated company pursuant to the Monopoly Regulation and Fair
Trade Act; the same shall apply hereinafter) for last 2 years;
7. Spouse, a lineal ascendant or descendant of a full-time officer of the
insurance company;
8. A person who is or has been a full-time officer or an employee of a
corporation, for last 2 years, which has important business
relation-
ship prescribed by Presidential Decree with the insurance company,
or which is a competitor or collaborator of the insurance
company;
9. A full-time officer or an employee of a company for which a full-time
officer or an employee of the insurance company is working
part-
time; or
10. A person who has difficulty in faithfully performing the duties as an
outside director, or who may exercise influence over the
insurance
company as prescribed by Presidential Decree.
(5) In the case that the composition of the board of directors is not in
conformity with the requirement referred to in paragraph
(1) on the
grounds of resignation or death of any outside director, etc., the com-
position of the board of directors shall be
brought into conformity with
the requirement referred to in paragraph (1) at the regular general
meeting of shareholders that is
held for the first time since the date on
which such grounds accrue.
Article 16 (Audit Committee)
(1) Every insurance company (limited to insurance companies pre-
scribed by the Presidential Decree in light of their assets, etc.)
shall set
up the audit committee (referring to the audit committee provided for
INSURANCE BUSINESS ACT
14
in the provisions of Article 415-2 (1) of the Commercial Act; hereafter
the same shall apply). 1. 2/3 or more of all the members shall be outside directors; and
2. One or more of the members shall be specialists in accounting or fi-
nancial affairs as prescribed by Presidential Decree.
(3)
A person who falls under any of the following subparagraphs shall
not be a member of the audit committee other than an outside director,
and such member shall lose his position when he comes to fall thereun-
der: Provided, That any person who is currently serving
as a standing
auditor or as a non-outside-director member of the audit committee may
become a non-outside-director member of the
audit committee even though
he falls under subparagraph 2: 1. A person who fall under Article 15 (4) 1 through 5;
2. A person who is or has been a full-time officer or an employee of the
insurance company for last 2 years; or
3. A person who may have influence over the management of the in-
surance company, as prescribed by Presidential Decree.
(4) In
the case that the composition of the audit committee is not in
conformity with the requirement referred to in paragraph (2) on the
grounds of the resignation or death etc. of any member of the audit com-
mittee, the relevant insurance company shall bring the
composition of
the audit committee into conformity with the requirement referred to
in paragraph (2) at the regular general meeting
of shareholders that is
held for the first time since the date on which such grounds accrue.
(5) The provisions of the proviso
of Article 415-2 (2) of the Commercial
Act shall not apply to the composition of the audit committee referred
to in paragraph (1).
(2) Every insurance company shall check on the observance of the
internal-control standards and appoint not less than one person
charged
with the duties of checking on the observance of the internal-control
INSURANCE BUSINESS ACT
15
standards, investigating any violation of the internal-control standards and
reporting the findings of such investigation to the
auditor or the audit
committee (hereinafter referred to as the "law-abiding overseers").
(3) Every insurance company shall, when
it intends to appoint law-abiding
overseers, go through a resolution of the board of directors: Provided,
That the same shall not
apply to the local branch office of any foreign
insurer.
(4) Every law-abiding overseer shall meet requirements falling under
each of the following subparagraphs:
1. He is required to have the background falling under each of the fol-
lowing items:
(a) Person who has worked not less than ten years for the Bank of
Korea and any institution subject to the audit conducted in ac-
cordance with the provisions of Article 38 of the Act on the
Establishment, etc. of Financial Services Commission (including
any
foreign financial institution equivalent thereto);
(b) Person who has worked at least five years as a researcher at any
research
institute or as a full-time lecturer or higher at any college
after earning the master's degree or higher in finance-related fields;
(c) Person who has worked at least five years as an attorney-at-law,
a certified public accountant or a certified insurance accountant
in professions related to his qualifications; and
(d) Person who has worked at least five years for the Ministry of Strat-
egy
and Finance, the Financial Services Commission, the Financial
Supervisory Service established pursuant to the Act on the Estab-
lishment, etc. of Financial Services Commission (hereinafter re-
ferred to as the "Financial Services Commission") or for the Secu-
rities and Futures Commission, and five years have elapsed yet
since his resignation or retirement;
2. He is required not to fall under each subparagraph of Article 13 (1);
and
3. He is required to have not been subject to any caution or any warning
from the Chairman of the Financial Services Commission or
the Governor
of the Financial Supervisory Service (hereinafter referred to as the
"Chairman of the Financial Services Commission")
for violating
finance-related Acts and subordinate statutes prescribed by Presi-
dential Decree in the recent five years.
INSURANCE BUSINESS ACT
16
(5) Law-abiding overseers shall perform their duties with the care of
good managers, but they shall not take charge of the duty
of performing
the business falling under each of the following subparagraphs:
1. The business of operating assets;
2. The business and incidental business that are prescribed by Pres-
idential Decree as being concerned with the insurance business
ran
by the relevant insurance company; and
3. The financial business that is concurrently run by the relevant in-
surance company other than the business of subparagraph 2.
(6) Every insurance company shall, if law-abiding overseers ask its offi-
cers and employees to furnish material and information
needed to per-
form their duties, get such officers and employees to comply sincerely
with the request.
(7) Every insurance company shall not unfairly disadvantage any former
law-abiding overseer in the personnel administration on the
grounds of
duties he performed as a law-abiding overseer.
(8) With regard to any insurance company that is recognized to have set
effective internal-control standards and rigorously adhered
to them, the
Financial Services Commission may omit the inspection provided for in
the provisions of Article 133, shorten the inspection
period, or reduce or
exempt the sanctions provided for in the provisions of Article 134 for such
insurance company.
SECTION 2 Stock Company
Article 18 (Reduction of Capital)
(1) When any stock company that is an insurance company (hereinafter
referred to as "stock company") resolves to reduce its capital,
such stock
company shall publish a summary of the resolution and its balance sheet
within 2 weeks from the date on which it resolves
to that effect.
(2) The provisions of Articles 139, 141 (2) and (3), 149 and 151 (3) shall
apply mutatis mutandis to the case of
capital reduction.
Article 19 (Exercise of Rights by Minority Shareholders of Stock Com-
pany)
(1) Any person who has continued to hold not less than 5/100,000 of
the total number of shares issued by any stock company (limited
to stock
INSURANCE BUSINESS ACT
17
companies prescribed by Presidential Decree in light of their assets, etc.;
hereafter the same in this Article shall apply) for
at least six months
under the conditions as prescribed by Presidential Decree may exercise
his right as a shareholder, which is
provided for in the provisions of Article
403 of the Commercial Act (including the case where the provisions are
applied mutatis
mutandis under Articles 324, 415, 424-2, 467-2 and 542
of the Commercial Act).
(3) Any person who has continued to hold not less than 50/10,000 (not
less than 25/10,000 in the case of any stock company prescribed
by the
Presidential Decree) of the total number of shares issued by any stock
company for not less than six months under the conditions
as prescribed
by the Presidential Decree may exercise his right as a shareholder, which
is provided for in the provisions of Articles
363-2 and 466 of the Com-
mercial Act. In this case, if the right of a shareholder provided for in
the provisions of Article 363-2
of the Commercial Act is exercised, the
exercise of such right shall be based on the voting share.
(4) Any person who has continued to hold not less than 150/10,000 (not
less than 75/10,000 in the case of any stock company prescribed
by
Presidential Decree) of the total number of shares issued by any stock
company for not less than six months under the conditions
as prescribed
by Presidential Decree may exercise his right as a shareholder, which is
provided for in Articles 366 and 467 of
the Commercial Act. In this case,
if the right of a shareholder provided for in the provisions of Article 366
of the Commercial
Act is exercised, the exercise of such right shall be
based on the voting share.
18
applied mutatis mutandis under Articles 324, 415, 424-2, 467-2 and
542 of the Commercial Act), the shareholder may immediately bring
a
claim against the relevant stock company for the payment of all expenses
incurred by the lawsuit.
(1) Every stock company may change its organization into a mutual com-
pany.
(2) Notwithstanding the provisions of Article 9, the mutual company re-
ferred to in paragraph (1) may set the total amount of its
fund at not
more than 30 billion won or may not set the total amount of its fund.
(3) In the case of paragraph (1), the mutual
company shall accumulate
an amount, which is deemed necessary by the Financial Services Commission
as a reserve to be appropriated
for making up for losses.
Article 21 (Resolution on Change in Organization)
(1) Any change in the organization of every stock company shall go
through a
resolution of the general meeting of shareholders.
(2) The resolution referred to in paragraph (1) shall be governed by the
provisions
of Article 434 of the Commercial Act.
Article 22 (Publication and Notice of Resolution on Change in Organi-
zation)
(1) Any stock company shall, if it resolves to change its organization,
publish a summary of the resolution and its balance sheet,
and notify
each of pledgees listed on the roll of shareholders of such resolution
within 2 weeks from the date of resolution.
(2) The provisions of Article 141 (2) and (3) and Article 232 of the Com-
mercial Act shall apply mutatis mutandis to the case of
paragraph (1).
Article 23 (Insurance Contracts after Publication of Resolution on
Change in Organization)
(1) Any stock company shall, if it intends to conclude any insurance con-
tract after the date on which the publication provided
for in the provi-
sions of Article 22 (1) is made, put any person to become a policy holder
on notice that procedures for a change
in its organization are in prog-
ress and then obtain his approval therefore.
(2) The policy holder referred to in paragraph (1) who gives approval
shall be deemed not to be a policy holder in relation with
the procedures
for changing the organization.
INSURANCE BUSINESS ACT
19
Article 24 (Call of General Meeting of Policy Holders)
(1) In the case that the number of policy holders who raise an objections
to the publication of Article 22 (1) within the period provided for in Ar-
ticle 141 (2) and their insurance money do not exceed
the ratio provided
for Article 141 (3), directors shall promptly call a general meeting of
policy holders after the completion
of the procedures provided for in Ar-
ticle 232 of the Commercial Act.
(2) The provisons of Article 55, Articles 363 (1) and (2), 364, 367,
368 (3) and (4), 371 (2), 372, 373 and 376 through 381 of the
Commer-
cial Act shall apply mutatis mutandis to the general meeting of policy
holders.
(2) The resolution provided for in the provisions of Article 21 (1) may
be changed into the resolution referred to in paragraph
(1). In this case,
such change shall not undermine the interests of creditors of the rele-
vant stock company.
(3) In the case that the change referred to in paragraph (2) causes dam-
INSURANCE BUSINESS ACT
20
age to shareholders, an agreement thereon shall be obtained from the
general meeting of shareholders. In this case, the provisions
of Article
21 (2) shall be applied mutatis mutandis.
(4) The provisions of Article 316 (2) of the Commercial Act shall ap-
ply mutatis mutandis to the resolution referred to in paragraph
(1).
Article 29 (Registration of Change in Organization)
(1) In the case that any stock company changes its organization, such
stock
company shall have its resolution registered and the relevant mu-
tual company shall have its incorporation registered under the
provi-
sions of Article 40 (2), respectively, within 2 weeks from the date of such
change in the locations of their headquarters
offices or their principal
offices and within 3 weeks from the date of such change in the locations
of their branch offices or
their sub-branch offices.
(2) Applications for registrations referred to in paragraph (1) shall be
accompanied by the articles
of incorporation, the publication provided
for in Article 22 (1), the resolution and consent provided for in Article
28, the objection
provided for in Article 141 (3) and documents attesting
the completion of the procedures provided for in the provisions of Arti-
cle 232 of the Commercial Act.
The provisions of Article 145, Articles 40, 339, 340 (1) and (2), 439 (1),
445 and 446 of the Commercial Act shall apply mutatis
mutandis to a
change in the organization of the stock company. In this case, "Article
192" shall be deemed "Article 238" in Article
446 of the Commercial Act.
Article 32 (Preferential Acquisition Rights of Policy Holders, etc.)
(1) Any policy holder or any person who is entitled to receive
insurance
money shall be granted the preferential right to acquire the amount
accumulated for the insured from the relevant stock
company's assets,
except as especially provided for in other Acts.
(2) In the case that any special account is set up in accordance with Ar-
ticle 108, the provisions of paragraph (1) shall apply
to such special ac-
count separately from other accounts.
Article 33 (Preferential Rights to Repayment from Deposited Assets)
(1) Any policy holder or any person who is entitled to receive
insurance
INSURANCE BUSINESS ACT
21
money shall take precedence over creditors in being granted the prefer-
ential right to be repaid the amount accumulated for the
insured from
assets deposited by the relevant stock company on orders from the Financial
Services Commission under this Act.
Sub-Section 1 Incorporation
Article 34 (Matters To Be Entered in Articles of Incorporation)
The incorporators of any mutual company shall prepare the articles
of
incorporation, enter matters falling under each of the following subpar-
agraphs in the articles of incorporation and then subscribe
their names
and affix their seals thereon:
1. The types of insurance business it intends to run and the scope of
business;
2. Name;
3. The location of its office;
4. The total amount of the fund;
5. Rights to be held by investors in the fund;
6. Methods of depreciating the fund and incorporation expenses;
7. Ways of distributing the surplus;
8. Ways for the mutual company to publish;
9. If there are assets that the relevant mutual company agrees to ac-
quire by transfer after its incorporation, the value of such
assets and
the name of transferor; and
10. The term of existence and the grounds of dissolution, if prescribed.
Article 35 (Name)
Every mutual company shall use the letter, "the mutual company", in
its name.
Article 36 (Payment of Fund)
(1) The fund for every mutual company shall be paid in money, not in
assets.
(2) The provisions of Articles 295 (1), 305 (1) and (2) and 318 of the
Commercial Act shall apply mutatis mutandis to the payment
of the
fund.
Article 37 (Number of Members)
Not less than 100 members are required to incorporate any mutual com-
pany.
INSURANCE BUSINESS ACT
22
Article 38 (Instruments of Subscription for Membership)
(1) In the case that any person who is not an incorporator intends to
be
a member of the relevant mutual company, he shall enter his objectives
and insurance amount in two copies of the instrument of subscription
for membership and subscribe his name and affix his seal thereon: Pro-
vided, That the same shall not apply to any person who intends
to be
a member after the incorporation of the relevant mutual company.
(2) Incorporators shall each prepare the instrument of subscription
for
membership referred to in paragraph (1) and enter matters falling under
each of the following subparagraphs in the instrument
of subscription
for membership and then keep it:
1. The date on which the articles of incorporation is certified and the
name of the notary public who certifies the articles of incorporation;
2. Matters referred to in each subparagraph of Article 34;
3. Names and addresses of investors in the fund and the amount of
investment made by each of the investors;
4. Names and addresses of incorporators;
5. If incorporators are remunerated, the amount of such remuneration;
6. The number of members intended to recruit at the time of incorpo-
ration; and
7. In the case that the inaugural general meeting is not held by a cer-
tain time, the purport that the instruments of subscription
for mem-
bership may be revoked.
(3) The provisions of the proviso of Article 107 (1) of the Civil Act shall
not apply to the instruments of subscription for membership
prior to the
incorporation of the relevant mutual company.
Article 39 (Inaugural General Meeting)
(1) In the case that the payment of the fund is completed for the rele-
vant mutual company and the number of members reaches the
intended
level, incorporators shall call without delay the inaugural general meet-
ing.
(2) The inaugural general meeting shall resolve with the attendance of
a majority of members and the concurrent of not less than
three quarters
of the voting right.
(3) The provisons of Article 55, Articles 363 (1) and (2), 364, 368 (3)
and (4), 371 (2), 372, 373 and 376 through 381 of the Commercial
Act
shall apply mutatis mutandis to the inaugural general meeting of every
mutual company.
23
Article 40 (Incorporation Registration)
(1) Every mutual company shall have its incorporation registered within
two weeks from the date on which its inaugural general meeting
comes
to a close.
(2) Matters falling under each of the following subparagraphs shall be
entered in the registration of incorporation:
1. Matters referred to in each subparagraph of Article 34;
2. Names and addresses of directors and auditors;
3. Name of representative director; and
4. In the case that several representative directors jointly represent the
company, the regulations governing the joint representation
of the
company.
(3) The registration of incorporation referred to in paragraphs (1) and (2)
shall be made by joint applications of directors and
auditors.
Article 41 (Register)
Every competent register office shall keep a register for mutual companies.
Article 42 (Liability for Indemnifying Damage)
The liability for indemnifying damage caused to any mutual company by
any director who illegally put a dividend agenda on the general
meeting
of members, unjustifiably loans money to other director or gets involved
in illegal transactions shall not be exempted
without the consent of the
general meeting of members.
Article 43 (Lawsuit Filed Against Incorporators)
The provisions of Article 19 of this Act and Article 400 of the Commer-
cial Act shall apply mutatis mutandis to incorporators of
mutual com-
panies.
Article 44 (Application of Commercial Act)
The provisions of Articles 10 through 15, 17, 22, 23, 26, 27, 29 through
33, 35, 37 through 40, 87 through 89, 91, 92, 171 through
173, 176,
177, 181 through 183, 288, 289 (3), 292, 310 through 316, and 322
through 327 of the Commercial Act shall apply mutatis
mutandis to
mutual companies.
The provisions of Articles 72 (1) and (2), 73, 77, 78, 80, 81, 84, 85, 90
through 100, 117 through 121, 123 through 127, 129 through
131, 138
through 143, 147, 149 through 161, 164, 179 through 181, 189, 190,
215, 216, 218, 232, and 233 through 246 of the Non-Contentious
Case
itigation Procedure Act shall apply mutatis mutandis to mutual com-
INSURANCE BUSINESS ACT
24
panies.
Sub-Section 2 Rights and Duties of Members
Article 46 (Indirect Responsibility)
The members of every mutual company shall not take any direct re-
sponsibility to the creditors of their company.
Article 47 (Limited Liability)
The liability of the members of every mutual company for the debts of
their company shall be limited to their insurance premiums.
Article 48 (Prohibition on Offset)
The members of every mutual company shall not oppose against the pay-
ment of insurance premiums with offset.
Article 49 (Reduction of Amount of Insurance Money)
Every mutual company shall prescribe matters concerning the reduction
of the
amount of the insurance money in the articles of incorporation.
Article 50 (Succession of Life Insurance Contracts, etc.)
Any member
of the mutual company that has been incorporated for the
purpose of running the life insurance business and the third insurance
business may have any other person succeed his right and duty after
obtaining approval from his mutual company.
Article 51 (Transfer of Objectives of Damage Insurance)
In cases where any member of the mutual company that has been
incorporated
for the purpose of running the business of insurance against
loss transfers the objectives of his insurance contract, the transferee
may
succeed the right and duty of the transferor after obtaining approval from
the mutual company.
Article 52 (Roll of Members)
The roll of members of every mutual company shall contain matters fall-
ing under each of the following subparagraphs:
1. Names and addresses of members; and
2. Kinds of insurance contracts, the amount of insurance money and
insurance premiums of each member.
Article 53 (Notice and Peremptory Notice)
The provisions of Article 353 of the Commercial Act shall apply mutatis
mutandis to the instruments of subscription for membership
of mutual
companies and notice as well as peremptory notice to each of their
members: Provided, That the same shall not apply to
the notice and
peremptory notice of matters belonging to the insurance relationship.
INSURANCE BUSINESS ACT
25
Sub-Section 3 Agency of Company
Article 54 (Agency of General Meeting of Members)
(1) Every mutual company may prescribe an agency acting on behalf of
the general
meeting of members in the articles of incorporation.
(2) The regulations governing the general meeting of members shall apply
mutatis
mutantis to the agency referred to in paragraph (1).
Article 55 (Voting Right)
The members of every mutual company shall each have one voting right
at the general meeting of members: Provided, That the same
shall not
be applied if the articles of incorporation carry any special regulations
governing such voting right.
Article 56 (Right to Claim Call of General Meeting of Members)
(1) Not less than 5/100 of the members of every mutual company may
submit a document containing the agenda of the general meeting of mem-
bers and the grounds of calling such general meeting of
members to the
board of directors to claim the call of the general meeting of members:
Provided, That the articles of incorporation
may set standards for exer-
cising their rights.
(2) The provisions of Article 366 (2) and (3) of the Commercial Act
may apply mutatis mutandis to the case of paragraph (1).
Article 57 (Keeping of Documents and Perusal, etc.)
(1) The directors of every mutual company shall keep the articles of
incorporation
and minutes of the general meetings of members and the
board of directors at its office and the roll of members at its principal
office.
(2) The members and creditors of every mutual company may peruse
or copy documents referred to in paragraph (1) at any time during
busi-
ness hours and claim the delivery of certified or abridged copies after
paying expenses set by the company.
Article 58 (Exercise of Minority Members' Rights)
The provisions of Article 19 shall apply mutatis mutandis to mutual
companies.
In this case, "the total number of shares issued" and "persons
who holds shares under the conditions as prescribed by the Presidential
Decree" shall be deemed "the total number of members" and "members,"
respectively.
Article 59 (Application of Commercial Act, etc.)
(1) The provisions of Articles 362, 363 (1) and (2), 364, 356 (1) and (3),
367, 368 (1), (3) and (4), 371 (2), 372, 373 and 375
through 381 of
INSURANCE BUSINESS ACT
26
the Commercial Act shall apply mutatis mutandis to the general meet-
ing of members of mutual companies.
(3) The provisions of Article 19 of this Act and Articles 382, 385, 386,
388, 394, 399 (1), 401 (1), 407, 410 through 413-2 and
414 (3) of the
Commercial Act shall apply mutatis mutandis to auditors of mutual
companies.
Article 60 (Reserve for Making Up for Losses)
(1) Every mutual company shall accumulate the reserve to make up for
losses from the surplus each business year.
(2) The total amount of the reserve referred to in paragraph (1) and the
minimum amount of the reserve to be accumulated each year
shall be
prescribed by the articles of incorporation.
Article 61 (Restrictions on Payment of Interest Accruing from Fund, etc.)
(1) Every mutual company shall pay the interest accruing
from the fund
only after it makes up for losses with such interest.
(2) The depreciation of the fund or the distribution of the
surplus shall
be made only after incorporation expenses and the total amount of work-
ing expenses are depreciated and the reserve
provided for in Article
60 (1) is deducted.
(3) In the case that the interest accruing from the fund is paid, the fund
is depreciated or the surplus is distributed in violation
of the provisions
of paragraphs (1) and (2), the creditors of the relevant mutual company
may have such payment, depreciation and
distribution refunded.
Article 62 (Reserve for Depreciating Fund)
In the case that the fund is depreciated, an amount equivalent to the
depreciated amount shall be replenished.
Article 63 (Distribution of Surplus)
In the case that the articles of incorporation carries no special regula-
tions governing the surplus, the surplus shall be distributed
to mem-
bers at the end of each business year.
Article 64 (Application of Commercial Act)
The provisons of Articles 447 through 450. 452 and 468 of the Com-
mercial Act shall apply mutatis mutandis to the accounts of mutual
INSURANCE BUSINESS ACT
27
companies.
(1) Any change in the articles of incorporation of every mutual company
shall be made upon a resolution of the general meeting of
members.
(2) The provisions of Article 55 of this Act and the Articles of 363 (1)
and (2), 364, 368 (3) and (4), 371 (2), 372,
373, 376 through 381 and
433 (2) of the Commercial Act shall apply mutatis mutandis to the case
of paragraph (1).
Article 66 (Grounds of Resignations)
(1) Every member of mutual companies shall resign from his company
on the grounds falling under each of the following subparagraphs:
1. The grounds prescribed in the articles of incorporation accrue; and
2. The insurance relationship is terminated.
(2) The provisions of Article 283 of the Commercial Act shall apply mu-
tatis mutantis
to the case of the death of a member of any mutual com-
pany.
Article 67 (Right to Claim Refund)
(1) Any member who resigns from his mutual company may claim the
refund of an amount belonging to his right under the conditions
as pre-
scribed by the articles of incorporation or his insurance clause.
(2) In the case that any member who resigns has a debt
owed to his mu-
tual company, the relevant mutual company may deduct such debt from
the amount referred to in paragraph (1).
Article 68 (Refund Deadline and Prescription)
(1) The refund of an amount belonging to the right of any member who
resigns from his mutual company shall be made within 3 months
from
the date on which the business year belonging to the date of his resig-
nation comes to an end.
(2) The right to claim the refund by any member who resigns from his
mutual company shall, if not exercised for 2 years after the
lapse of the
term referred to in paragraph (1), be terminated by prescription.
Sub-Section 7 Dissolution
Article 69 (Publication of Dissolution)
INSURANCE BUSINESS ACT
28
(1) Any mutual company shall, if it resolves to dissolve itself, publish
a summary of the resolution and its balance sheet within
2 weeks from
the date on which such resolution is authorized in accordance with Ar-
ticle 139.
(2) The provisions of Articles 141 (2) through (4), 145 and 149 shall
apply to the case of paragraph (1).
Article 70 (Application of Commercial Act)
(1) The provisions of Articles 174 (3), 175 (1), 228, 232, 234 through
240, 522 (1) and (2), 526 (1), 527 (1) and (2), 528 (1) and
529 of the
Commercial Act shall apply mutatis mutandis to mutual companies. In
this case, "Article 317" in Article 528 (1) of the
Commercial Act shall
be deemed "Article 40 of the Insurance Business Act".
(2) The provisions of Article 39 (2) shall apply mutatis mutandis to the
selections and appointments provided for in the provisions
of Article
175 (1) of the Commercial Act.
Article 71 (Liquidation)
Any mutual company shall, if it is dissolved, be liquidated in accordance
with the provisions of this Sub-Section with the exception
of the case
of merger and bankruptcy.
Article 72 (Order of Disposal of Assets, etc.)
(1) The liquidator of the relevant mutual company shall dispose of its
assets according to the order falling under each of the following
sub-
paragraphs:
1. The repayment of general debts;
2. The payment of insurance money to members and the payment of
the money required to be refunded to members under Article 158
(2);
and
3. The depreciation of the fund.
(2) The remainder of assets shall, if the articles of incorporation of the
relevant mutual company
does not specially prescribe, be distributed to
members in the same ratio as that of the surplus distribution.
Article 73 (Application
of Commercial Act, etc.)
The provisions of Articles 19, 56 and 57 of this Act and the Articles of
245, 253 through 255, 259, the proviso of 260, 264, 328,
362, 367, 373
(2), 376, 377, 382 (2), 386, 388, 389, 394, 398, 399 (1), 401 (1), 407,
INSURANCE BUSINESS ACT
29
408, 411 through 413, 414 (3), 448 through 450, 531 through 537, 539
(1), 540 and 541 of the Commercial Act shall apply mutatis
mutandis
to the liquidation of mutual companies.
(1) In the case that the principal office of any foreign insurer falls under
any of the following subparagraphs, the Financial Services
Commission
may revoke the license of the insurance business for the local branch office
of such foreign insurer after going through
hearing:
1. When the principal office is shut down by merger or the transfer of
business, etc.;
2. When the principal office is subject to a measure equivalent to a
disposition provided for in Article 134 (2), which is taken
by any for-
eign financial supervisory agency on the grounds of its illegal act and
unfair business practices; and
3. When the principal office suspends its business or ceases to do its
business.
(2) In cases where the principal office of any foreign insurer falls under
paragraph (1), the local branch offices of such foreign
insurer shall report
such fact to the Financial Services Commission within seven days from
the date on which the grounds thereof
occur.
Article 75 (Obligation to Hold Local Assets)
The local branch offices of foreign insurers shall hold assets equivalent
to the liability reserve and the emergency-risk reserve
accumulated in
accordance with Article 120 in the Republic of Korea to guarantee the
fulfillment of insurance contracts concluded
in the Republic of Korea.
Article 76 (Representatives of Local Branch Offices)
(1) The provisions of Article 209 of the Commercial
Act shall apply mu-
tatis mutandis to the local branch offices of foreign insurers.
(2) The representatives of local branch offices of foreign insurers shall
retain their rights and duties even after their resignations
until the
names and addresses of their successors are registered in accordance
with Article 614 (3) of the Commercial Act.
INSURANCE BUSINESS ACT
30
(3) The representatives of local branch offices of foreign insurers shall
be deemed officers of insurance companies provided by
this Act.
Article 77 (Persons in Charge of Clearing Up Remaining Business)
(1) In the case that the principal office of any foreign
insurer, whose local
branch offices have been each granted a license to run the insurance busi-
ness in accordance with Article
4, ceases to do the insurance business
or is dissolved, or ceases to do the insurance business in the Republic
of Korea or the
licenses of such local branch offices are revoked, the Financial
Services Commission may, if it is deemed necessary, select and
appoint
or dismiss persons in charge of clearing up the remaining business.
(2) The provisions of Article 76 (1) and 157 shall apply mutatis mu-
tandis to the persons in charge of clearing up the remaining
business
referred to in paragraph (1).
(3) The provisions of Article 160 shall apply mutatis mutandis to the
case of paragraph (1).
Article 78 (Registration)
(1) The provisions of Article 41 shall apply mutatis mutandis to local
branch offices of any foreign insurer that is a mutual company
(herein-
after referred to as the "foreign mutual company").
(2) When any local branch office of a foreign mutual company intends
to file an application for its registration, the representative of such local
branch office shall file an application stating its
principal office in the
Republic of Korea and the name and address of the representative of
such principal office, accompanied
by documents falling under each of
the following subparagraphs:
1. Document attesting the presence of the principal office in the Re-
public of Korea;
2. Document attesting the representative's qualifications; and
3. Document discerning the articles of incorporation and the nature of
the company.
(3) The documents referred to in paragraph (2) shall be each certified
by any competent agency in the home country of the relevant
foreign
mutual company.
Article 79 (Application of Commercial Act)
(1) The provisions of the Chapter of the Part (excluding Article
16), Articles 22, 23, 24, 26, the Chapter and of the Part ,
the
Chapter of the Part (excluding Article 90) and Article 177 of the
Commercial Act shall apply mutatis mutandis to the local
branch offices
INSURANCE BUSINESS ACT
31
of foreign mutual companies.
The provisions of Articles 72 (3), 101 (2), 128 through 131, 137 through
143, 147, 150, 153 through 156, 159 through 161, 164, 179,
181, 189,
190, 230 through 237 and 239 through 246 of the Non-Contentious
Case Litigation Procedure Act shall apply mutatis mutandis
to the local
branch offices of foreign mutual companies.
Article 81 (Legal Fiction of Resolution of General Meeting of Share-
holders)
In the application of the provisions of Articles 141, 142, 144 (1) and
146 (2) to the local branch offices of foreign insurers,
the "date on which
the general meeting of shareholders resolves in accordance with Article
138" in Article 141 (1) shall be deemed
the "date on which a transfer
contract is prepared", "when the general meeting of shareholders re-
solves" in Articles 142 and
144 (1) shall be deemed "when a transfer
contract is prepared" and "after the general meeting of shareholders
resolves prior to
the conclusion of an insurance contract" in Article 146
(2) shall be deemed "after the preparation of a transfer contract", re-
spectively.
Article 82 (Exclusion from Application)
(1) The portion concerning the dissolution and merger in Articles 8, 15,
16, 138 and 139, and the provisions of Articles 141 (4).
148, 149, 151
through 154, 156, 157 and 159 through 161 shall not apply to the local
branch offices of foreign insurers.
(2) The provisions concerning the resolution of the general meeting of
shareholders in the Chapter shall not apply to the local
branch of-
fices of foreign insurers.
CHAPTER INSURANCE SOLICITATION
SECTION 1 Insurance Solicitors
Article 83 (Persons Entitled to Be Engaged in Insurance Solicitation)
INSURANCE BUSINESS ACT
32
(1) Persons entitled to be engaged in the insurance solicitation shall
fall under each of the following subparagraphs:
1. Insurance solicitors;
2. Insurance agencies;
3. Certified insurance brokers;
4. Officers or employees of any insurance company (excluding the rep-
resentative director, outside directors, auditors and members
of the
audit committee; hereafter in this Chapter the same shall apply);
and
5. Officers or employees of any insurance agency and any insurance
brokerage company, who are all reported to be engaged in the insur-
ance solicitation under this Act.
(2) Notwithstanding the provisions of paragraph (1) 5, the insurance
agencies, etc. of financial institutions provided for in Article
91 are not
allowed to have separate employees employed for the purpose of having
them engaged in the insurance solicitation under
the conditions as pre-
scribed by the Presidential Decree.
Article 84 (Registration of Insurance Solicitors)
(1) Every insurance company shall have any person intending to be an
insurance
solicitor registered with the Financial Services Commission.
(2) The person falling under each of the following subparagraphs shall
be disqualified as an insurance solicitor:
1. An incompetent or quasi-incompetent person;
2. A person who was declared bankrupt and who has not yet been
reinstated;
3. A person who has been sentenced to a fine or to a heavier punishment
under this Act, and two years have not yet passed since the
expiration
of the term of sentence, or since the decision to exempt such sentence
has been made (including cases where the execution
of such sentence
is deemed terminated);
4. A person who has suffered the revocation of his registration as an
insurance solicitor, an insurance agent or a certified insurance
broker
in accordance with this Act and two years have not yet passed since
the date of the revocation of his registration (three
years after the
revocation of the registration in the case of the insurance agency, etc.
of any financial institution provided
for in Article 91);
INSURANCE BUSINESS ACT
33
5. A minor who does not have the same ability as that of an adult in
performing the insurance business and his legal representative
falls
under subparagraphs 1 through 4;
6. An officer or a manager who falls under each of subparagraph 1 through
4 and works for an incorporate body or a foundation that
is not a
corporation; and
7. A person who has misused insurance premiums for other purposes,
which he has collected in connection with his insurance solicitation,
and two years have not yet passed since the date of his misuse of
such insurance premiums.
(3) The categorization of insurance solicitors and requirements for their
registrations shall be prescribed by Presidential Decree.
Article 85 (Restrictions on Insurance Solicitation by Insurance Solicitors)
(1) Every insurance company shall be prohibited from
entrusting any
insurance solicitor belonging to other insurance company with the in-
surance solicitation.
(2) Every insurance solicitor shall be prohibited from performing the
insurance solicitation for any insurance company other than
the insur-
ance company to which he belongs.
(3) In the case that the provisions of paragraphs (1) and (2) fall under
any of the following subparagraphs, the provisions shall
not be applied:
1. When any insurance solicitor belonging to a life insurance company
performs the insurance solicitation only for one damage insurance
company;
2. When any insurance solicitor belonging to a damage insurance com-
pany performs the insurance solicitation only for one life insurance
company; and
3. When any insurance solicitor belonging to a life insurance company
or a damage insurance company performs the insurance solicitation
only for one insurance company that runs the third insurance business.
(4) Matters to be observed by insurance companies and insurance
solic-
itor subject to the application of paragraph (3) when they perform the
insurance solicitation shall be prescribed by Presidential
Decree.
Article 86 (Revocation of Registration, etc.)
(1) In cases where any insurance solicitor falls under any of the following
subparagraphs, the Financial Services Commission shall
revoke his
registration: 1. When he falls under each subparagraph of Article 84 (2);
INSURANCE BUSINESS ACT
34
2. When he is found to be a person falling under each subparagraph of
Article 84 (2) at the time of his registration; and
3. When he has him registered in accordance with Article 84 by means
of false and illegality.
(2) In cases where any insurance solicitor falls under any of the following
subparagraphs, the Financial Services Commission may
order him to sus-
pend his work as an insurance solicitor for the fixed term of at least 6
months or revoke his registration: 1. When he has violated the provisions of this Act, which govern the
insurance solicitation; and
2. When he has violated any order given or any disposition taken under
this Act.
(3) The Financial Services Commission shall, when it intends to revoke
the registration of any insurance solicitor and order any
insurance solicitor
to suspend his work, hold a hearing.
(1) Any person who intends to be an insurance agency shall have him
registered with the Financial Services Commission.
(2) Any person who falls under any of the following subparagraphs shall
be prohibited from becoming any insurance agency:
1. Person who falls under each subparagraph of Article 84 (2);
2. Person who has him registered as an insurance solicitor or a certi-
fied insurance broker;
3. Person who is engaged in the insurance solicitation as an officer or
an employee of any insurance brokerage company or any insurance
agency;
4. Person who is deemed to fall under subparagraph 1 under foreign
Acts and subordinate statutes; and
5. Person who is prescribed by Presidential Decree as being feared to
perform the act of unfair insurance solicitation and actually
hinder
the competition.
(3) The Financial Services Commission may get any insurance agency that
INSURANCE BUSINESS ACT
35
has had it registered under paragraph (1) to deposit its security money
for business in the institution designated by the Financial
Services
Commission.
Article 88 (Revocation of Registration of Insurance Agency, etc.)
(1) The Financial Services Commission shall, when any insurance
agency
falls under any of the following subparagraphs, revoke its registration:
1. When it falls under each subparagraph of Article 87 (2);
2. When it is found to be a person who falls under each subparagraph
of Article 87 (2) at the time of its registration;
3. When it has itself registered by means of false and illegality; and
4. When it violates the provisions of Article 101.
(2) The provisions of Article 86 (2) through (4) shall apply mutatis mu-
tandis
to insurance agencies.
Article 89 (Registration of Certified Insurance Brokers)
(1) Any person who intends to be a certified insurance broker shall have
him registered with the Financial Supervisory Commission.
(2) The person falling under any of the following subparagraphs shall be
disqualified as a certified insurance broker:
1. Person who falls under each subparagraph of Article 84 (2);
2. Person who has him registered as an insurance solicitor or an in-
surance agency;
3. Person who is engaged in the insurance solicitation as an officer or
an employee of any insurance agency or any insurance brokerage
company;
4. Person who falls under Article 87 (2) 4 and 5;
5. Corporation whose liabilities exceed its assets; and
6. Person who fails to open his office in the Republic of Korea.
(3) In order for any certified insurance broker who has had him
regis-
tered under paragraph (1) to secure his indemnity for damage caused to
any policy holder by him while brokering the conclusion
of insurance
contracts, the Financial Services Commission may get such certified
insurance broker to deposit security money for
business in an institution
designated by the Financial Services Commission, to insure him or to take
INSURANCE BUSINESS ACT
36
other necessary measures.
(1) The Financial Services Commission shall, when any certified insurance
broker falls under any of the following subparagraphs,
revoke his
registration: 1. When he falls under each subparagraph of Article 89 (2): Provided,
That the same shall not apply to any corporation that is prescribed
by Presidential Decree and temporarily holds its liabilities in excess
of its assets in the case of Article 89 (2) 5;
2. When he is found to fall under each subparagraph of Article 89 (2)
at the time of his registration;
3. When he has him registered in accordance with Article 89 by means
of false and illegality; and
4. When he violates the provisions of Article 101.
(2) The provisions of Article 86 (2) through (4) shall apply mutatis mu-
tantis
to certified insurance brokers.
Article 91 (Business Standards for Insurance Agencies of Financial In-
stitutions, etc.)
(1) The institution falling under any of the following subparagraphs
(hereinafter referred to as the "financial institution") may
have itself
registered as an insurance agency or an insurance brokerage company
in accordance with Article 87 or 89: 1. Financial institutions established pursuant to the Banking Act;
2. Securities companies incorporated pursuant to the Securities and
Exchange Act;
3. Mutual savings banks incorporated pursuant to the Mutual Savings
Banks Act; and
4. Any other institution that is prescribed by Presidential Decree as an
institution that performs the financial business in accordance
with
other Acts.
(2) The scope of insurance products, which may be solicited by any fi-
nancial institution that has itself registered as an insurance
agency or
an insurance brokerage company (hereinafter referred to as the "insur-
ance agency of the financial institution. etc.")
shall be prescribed by
INSURANCE BUSINESS ACT
37
Presidential Decree taking into account the easiness of sales and the
possibility of unfair transactions, etc in financial institutions.
(3) Methods of insurance solicitation, the number of insurance solicitors,
business standards and other necessary matters for the
insurance agency
of the financial institution shall be prescribed by Presidential Decree.
Article 92 (Duties, etc. of Certified
Insurance Brokers)
(1) Every certified insurance broker shall enter matters related to his
brokerage that is performed for the
conclusion of insurance contracts in
books under the conditions as prescribed by Presidential Decree and make
such books accessible
to his policy holders. He shall also keep a book in
which his commissions are entered and make such book accessible to his
policy
holders.
(2) Every certified insurance broker shall be prohibited from becoming
an officer or an employee of any insurance company and from
being
concurrently engaged in the business of any insurance company, the ser-
vice of any insurance solicitor, the business of
any insurance agency,
the service of any certified insurance accountant and the service of any
certified damage evaluator when
he brokers the conclusion of insurance
contracts.
Article 93 (Matters to be Reported)
(1) Any insurance solicitor, any insurance agency or any certified insur-
ance broker shall, when the matter falling under each
of the following
subparagraphs occurs, report without delay the fact to the Financial Services
Commission: 1. When a change occurs in matters entered in the document that is
submitted when an application is filed for registration in accordance
with the provisions of Articles 84, 87 and 89;
2. When he falls under each subparagraph of Article 84 (2);
3. When he ceases to do the business of insurance solicitation;
4. When he dies in the case of individual;
5. When the corporation is dissolved in the case of corporation;
6. When the organization is terminated in the case of incorporate body
or foundation that is not a corporation;
7. When any insurance agency or any insurance brokerage company gets
its officers or employees to be engaged in the insurance solicitation
or any officer or any employee, for whom a report has been each made,
cease to be engaged in the insurance solicitation; and
8. When any insurance solicitor performs the insurance solicitation for
INSURANCE BUSINESS ACT
38
other insurance company under this Act, or any insurance agency or
any insurance brokerage company concurrently performs the busi-
ness of soliciting the conclusion of life insurance contracts and dam-
age insurance contracts.
(2) The relevant successor in the case of paragraph (1) 4, the relevant
liquidator, the person formerly in charge of executing the
business or the
bankruptcy administrator in the case of paragraph (1) 5 and the former
manager in the case of paragraph (1) 6 shall
each make a report referred
to in paragraph (1).
(3) In the case that any insurance company learns of the fact that any
insurance solicitor entrusted with the insurance solicitation
or any in-
surance agency entrusted with the insurance solicitation falls under each
subparagraph of paragraph (1), such insurance
company shall report the
case to the Financial Services Commission, notwithstanding the provisions
of paragraphs (1) and (2).
Any person who intends to be an insurance solicitor, an insurance agency
or a certified insurance broker in accordance with Articles
84, 87 and
89 shall each pay fees when he files an application for his registration
under the conditions as prescribed by Ordinance
of the Prime Minister.
SECTION 2 Matters Required to Be Observed In
Relation to Insurance Solicitation
Article 95 (Insurance Information Manual)
(1) The insurance information material that is used for the insurance
solicitation (hereinafter referred to as the "insurance information
man-
ual") shall contain matters falling under each of the following subpara-
graphs in a clear and easily understandable manner:
1. The firm name or title of the affiliated insurance company, or the
names, firm name or title of insurance solicitors, insurance
agencies
or certified insurance brokers;
2. Important matters concerning rights and duties accruing from being
insured;
3. Matters concerning guarantees prescribed in insurance clauses;
4. Matters concerning the refund following the rescission of insurance
INSURANCE BUSINESS ACT
39
contracts;
5. Matters concerning the protection of depositors under the Depositor
Protection Act; and
6. Other matters prescribed by Presidential Decree as necessary for the
protection of policy holders.
(2) In the case that matters concerning the assets and liabilities of any
insurance company are entered in the insurance information
manual, such
matters shall be the same as the matters that are entered in documents
submitted to the Financial Services Commission
in accordance with Article
118.
(4) The provisions of paragraphs (2) and (3) shall apply mutatis mutandis
to the case where matters concerning the assets and liabilities
of any
insurance company and other matters concerning the future dividend and
the future distribution of the surplus of such insurance
company are
transmitted to unspecified persons by means of broadcasting, computer
communications, etc. and other methods for the
purpose of facilitating
the insurance solicitation.
Article 96 (Matters to be Observed in Resorting to Communications
Means for Insurance Solicitation, etc.)
(1) Any person who solicits people to enter into insurance contracts by
means of communications such as telephone, mail and computer
com-
munications, etc. shall be qualified to be an insurance solicitor in accor-
dance with Article 83 and his insurance solicitation
shall not disturb the
calm lives of other persons.
(2) Where a person who has subscribed for an insurance contract by
means of communications pursuant to paragraph (1) intends to
withdraw
the subscription, the insurance company shall allow him to use the means
of communications.
40
Presidential Decree.
(1) Any person who is engaged in the conclusion of insurance contracts
or the insurance solicitation shall be prohibited from performing
the act
falling under each of the following subparagraphs in connection with the
conclusion of insurance contracts and the insurance
solicitation:
1. The act of having any policy holder or the insured informed of con-
tents of his insurance contract, which are different from
the fact or
failing to have such insurance policy holder or the insured informed
of important contents of his insurance contract;
2. The act of failing to explicitly indicate comparative objects and stan-
dards with regard to part of the contents of the insurance
contract
to any policy holder or the insured or to make it known to any policy
holder or the insured that part of the contents
of his insurance con-
tract is superior or advantageous to other insurance contracts without
explicitly indicating comparative
objects and standards, and objec-
tive grounds;
3. The act of hindering any policy holder or the insured from notifying
the relevant insurance company of important matters of his
insur-
ance contract or exhorting any policy holder or the insured not to notify
the relevant insurance company of such important
matters;
4. The act of exhorting any policy holder or the insured to notify the
relevant insurance company of the falseness in important matters
of
his insurance contract; and
5. The act of getting any policy holder or the insured to enter into a new
insurance contract after unfairly terminating his existing
insurance
contract (hereafter in this Article referred to as the "existing insurance
contract"), terminating the existing insurance
contract by getting such
policy holder or the insured to enter into a new insurance contract
or unfairly getting or exhorting any
person to enter into an insurance
contract.
(2) The regulations governing the prohibition on the comparison of part
of the contents of the insurance contract referred to in
paragraph (1) 2
shall not apply to the case where the person falling under each of the
following subparagraphs makes such comparison
for the purpose of
helping any policy holder opt for a rational insurance contract:
1. Any insurance company that runs not less than two life insurance
INSURANCE BUSINESS ACT
41
businesses, any insurance company that runs the business of insurance
against loss (excluding any insurance company that runs only
the
guaranty insurance business) or any insurance agency that has
concluded an agency contract with any insurance company that
runs
the third insurance business from among insurance agencies that have
had them registered in accordance with Article 87; and
2. Any certified insurance broker who has had him registered in accor-
dance with Article 89.
(3) In the case that any person who is engaged in the conclusion of
insurance contracts or the insurance solicitation performs the
act falling
under each of the following subparagraphs, his act shall be deemed the
act of illegally terminating the existing insurance
contract or having the
existing insurance contract illegally terminated in violation of para-
graph (1) 5:
1. The act of getting any person to enter into a new insurance contract
within 3 months from the date on which the existing insurance
con-
tract is terminated or terminating the existing insurance contract
within 3 months from the date on which the person enters
into the
new insurance contract; and
2. The act of failing to compare important matters such as the insur-
ance term between the existing insurance contract and a new
insur-
ance contract and estimated interest rates, etc., which are prescribed
by Presidential Decree and to notify the relevant
policy holder or the
insured of the findings of such comparison.
(4) In the case that any person who is engaged in the conclusion of in-
surance contracts or the insurance solicitation (excluding
any certified
insurance broker; hereafter in this paragraph the same shall apply)
terminates the existing insurance contract or
has the existing insurance
contract terminated in violation of paragraph 1 (5), the relevant policy
holder may claim the restoration
of the terminated insurance contract
to the insurance company, to which the person who is engaged in the
conclusion of insurance
contracts or the insurance solicitation belongs,
or by which the person is entrusted with the insurance solicitation,
within 6
months from the date on which the existing insurance contract
is terminated and then cancel a new insurance contract.
(5) The insurance
company shall, upon receiving the claim for the res-
toration of the terminated insurance contract under paragraph (4), go
along
with the claim for the restoration of the terminated insurance con-
INSURANCE BUSINESS ACT
42
tract unless the special grounds exist.
(6) Procedures for and methods of claiming the restoration of any in-
surance contract and other necessary matters concerning the
claim for
the restoration of any insurance contract under paragraphs (4) and (5)
shall be prescribed by Presidential Decree.
Article 98 (Prohibition on Provision of Special Interests)
Any person who is engaged in the conclusion of insurance contracts or
the insurance solicitation shall be prohibited from providing any policy
holder or the insured or promising to provide any policy
holder or the
insured with special interests falling under each of the following sub-
paragraphs in connection with the conclusion
of insurance contracts or
the insurance solicitation: 1. Money and goods (excluding any money and goods that are not in
excess of the amount prescribed by Presidential Decree);
2. The discount of insurance premiums and the payment of commissions
that are not based on the grounds prescribed in the basic document;
3. The promise of paying the amount of insurance money in excess of
the amount of insurance money set in the basic document;
4. The payment of insurance premiums for any policy holder or the insured;
5. The payment of interest accruing from loans that are extended by
the relevant insurance company to any policy holder or the insured;
6. The payment of an amount equivalent to the interest accruing from
any check or any bill that is received as insurance premiums;
and
7. The renunciation of the exercise of the subrogating claim against the
third party under the provisions of Article 682 of the Commercial
Act.
Article 99 (Prohibition on Payment of Commissions, etc.)
(1) Every insurance company shall be prohibited from entrusting any
person
with the insurance solicitation who is not qualified to perform
such insurance solicitation under Article 83 and paying any commission,
any remuneration or any price to such person in connection with his in-
surance solicitation: Provided, That the same shall not
apply to the case
falling under each of the following subparagraphs:
1. Where the entrustment and payment are made the way prescribed
in the basic document reported or submitted to the Financial Services
Commission under Article 127 (1) or (2);
2. Where any insurance company and any foreign insurer jointly take
INSURANCE BUSINESS ACT
43
over any original insurance contract outside the Republic of Korea
or any insurance company takes over any original insurance contract
or any reinsurance contract outside the Republic of Korea through
any foreign solicitation organization (limited to the case where
such
foreign solicitation organization is allowed to perform the insurance
solicitation in accordance with foreign Acts and subordinate
stat-
utes); and
3. Other cases prescribed by Presidential Decree.
(2) Any person who is engaged in the insurance solicitation shall be
prohibited
from allowing any other person to perform his insurance
solicitation, entrusting any other person with his insurance solicitation
or paying any commission, any remuneration and any price to the latter,
except the case falling under each of the following subparagraphs:
1. Where any insurance solicitor and any other insurance solicitor be-
long to the same insurance company;
2. Where any insurance agency and any other insurance agency that
have each entered into an entrustment contract with the same in-
surance company, or officers or employees who are reported to be
engaged in the insurance solicitation under subparagraph 5 of
Article
83; and
3. Where any insurance brokerage and any other insurance brokerage,
or officers or employees who are reported to be engaged in the
insur-
ance solicitation under subparagraph 5 of Article 83.
(3) Any insurance brokerage company shall not claim any commission
or
any price from any policy holder with the exception prescribed by Presi-
dential Decree.
Article 100 (Prohibited Act for Insurance Agency of Financial Institu-
tion)
(1) The insurance agencies, etc. of financial institutions shall be prohibited
from conducting acts falling under each of the following
subparagraphs
when they conduct their insurance solicitation:
1. The act of asking any person who receives the loan, etc. from the fi-
nancial institution to enter into an insurance contract
that the fi-
nancial institution brokers or acts as a broker on the condition that
the person is provided with the service rendered
by the financial
institution (hereinafter referred to as the "loan, etc.") or asking any
other person to enter into an insurance
contract with any specific
insurance company;
INSURANCE BUSINESS ACT
44
2. The act of including insurance premiums in the transactions of the
loan, etc. without obtaining an agreement therewith from the
person
who receives the loan, etc.;
3. The act of asking any officer or any employee of the financial insti-
tution, who is not a person entitled to perform the insurance
solici-
tation under Article 83, to perform the insurance solicitation or tol-
erating his performance of the insurance solicitation;
4. The act of performing the insurance solicitation at a place that is not
the branch office of the financial institution;
5. The act of using any personal information that has been obtained
through financial transactions unrelated to the insurance solicitation
for the purpose of performing the insurance solicitation without ob-
taining an agreement from the relevant person; and
6. Other act prescribed by Presidential Decree as similar to the act re-
ferred to in subparagraphs 1 through 5.
(2) The insurance agency, etc. of the financial institution shall observe
matters falling under each of the following subparagraphs
when it per-
forms the insurance solicitation:
1. In the case that the financial institution asks any person who re-
ceives the loan, etc. from it to enter into an insurance contract,
which
the financial institution brokers or acts as a broker, the financial
institution is required to make it known to such person
that even if
he does not enter into such insurance contract, his refusal does not
influence his receiving the loan, etc.;
2. The financial institution is required to make it known to every person
who enters into an insurance contract that the financial
institution
is not an insurance company but an insurance agency or a certified
insurance broker and that the payment liability
in the execution of
the insurance contract rests with the relevant insurance company;
3. The financial institution is required to separate a place where in-
surance contracts are solicited from a place where the loan,
etc. are
extended so distinctively that every person intending to enter into
an insurance contract can easily discern the two places;
and
4. Matters prescribed by Presidential Decree as similar to the matters
referred to in subparagraphs 1 through 3.
(3) The insurance agency, etc. of the financial institution and any per-
son who intends to be the insurance agency, etc. of the
financial insti-
tution shall be prohibited from performing the act falling under each of
INSURANCE BUSINESS ACT
45
the following subparagraphs to any insurance company on the condition
that he acts as a broker for or brokers the conclusion of
insurance con-
tracts:
1. The act of asking for a discount of any insurance contract, to which
the financial institution is a contractor, asking for extension
of credits
and financial support to the financial institution or asking for de-
posits in the financial institution;
2. The act of unfairly passing expenses or losses incurred by acting as
an broker for or brokering the conclusion of insurance contracts
on
to the insurance company; and
3. The act of making unfair requests taking advantage of the superior
status of the financial institution, which is prescribed by
Presidential
Decree.
(4) Specific standards for acts referred to in paragraph (3) shall be
prescribed by the Financial Services Commission under conditions
as
prescribed by Presidential Decree.
(2) In the case that the aggregate amount of insurance premiums, which
accrue from insurance contracts that are solicited by any
insurance agency
or any insurance brokerage company, the primary objective of which is
to make the self or a person who employs
the self the policy holder or
the insured, is in excess of the 50/100 of the insurance premiums of in-
surance contracts solicited
by such insurance agency or such insurance
brokerage company, the relevant insurance agency or the relevant in-
surance brokerage
company shall be deemed to focus on soliciting in-
surance contracts, the primary objective of which is to make the self or
a person
who employs the self the policy holder or the insured.
SECTION 3 Rights of Policy Holders
Article 102 (Indemnity Liability of Insurance Company Entrusting In-
surance Solicitation)
(1) Every insurance company shall take the responsibility for indem-
nifying damage caused to policy holders by its officers, employees
and
INSURANCE BUSINESS ACT
46
insurance solicitors as well as its insurance agencies when they perform
the insurance solicitation: Provided, That the same shall
not apply to
the case where any insurance company has entrusted insurance solicitors
or insurance agencies with the insurance solicitation
with great care and
has labored to prevent them from causing any damage to policy holders
when they have performed the insurance
solicitation.
(2) The provisions of paragraph (1) shall not hinder the exercise of the
claim for indemnity by any insurance company
against its officers, em-
ployees, insurance solicitors or insurance agencies.
(3) The provisions of Article 766 of the Civil Act
shall apply mutatis
mutandis to the claim for the indemnity arising from the provisions of
paragraph (1).
The insured or a person to receive insurance money shall not commit an
insurance fraud.
[This Article Newly Inserted by Act No. 8902, Mar. 14, 2008]
Article 103 (Preferential Right to be Repaid from Security Money for
Business)
In the case that any policy holder or any person who is entitled to re-
ceive insurance money suffers damage in connection with
the act of bro-
kering the conclusion of an insurance contract by a certified insurance
broker, such policy holder or such person
who is entitled to receive in-
surance money shall take precedence over creditors in being granted the
preferential right to be
repaid the amount of damage from the security
money for business provided for in Article 89 (3).
CHAPTER OPERATION OF ASSETS
SECTION 1 Principles for Operation of Assets
Article 104 (Principles for Operation of Assets)
(1) Every insurance company shall work to ensure the safety, liquidity,
profitability and public interests, when it operates its
assets.
(2) Every insurance company shall operate its assets with the care of
a good manager.
Article 105 (Prohibition and Restrictions on Operation of Assets)
(1) Every insurance company shall be prohibited from operating
its as-
sets in the manner falling under each of the following subparagraphs:
INSURANCE BUSINESS ACT
47
1. The holding of precious metals, antiques and paintings and writings
(excluding the case prescribed by Presidential Decree);
2. The holding of real estate that is not the real estate prescribed by
Presidential Decree as being used for business purposes (excluding
any
real estate that is acquired by the execution of the security right and
mortgage);
3. Loans extended for the purpose of speculation in goods and securities;
4. Loans extended for the purpose of purchasing, directly or indirectly.
shares of the relevant insurance company;
5. Loans extended, directly or indirectly, for the purpose of political funds;
6. Loans extended to officers or employees of the relevant insurance
company (excluding any loan extended according to insurance
clauses
or the small amount of loans prescribed by the Financial Services
Commission); and
7. The act that is prescribed by Presidential Decree as being feared to
greatly undermine the stable operation of assets.
(2) Every
insurance company may operate its assets for futures trading
provided for in the Futures Trading Act or other trading similar thereto
that is each prescribed by Presidential Decree under the conditions as
prescribed by Presidential Decree.
1. The extension of credits to the same individual or the same corpora-
tion: 3/100 of the total assets;
2. The aggregate amount of bonds or shares issued by the same corpo-
ration: 7/100 of the total assets;
3. The aggregate amount of credits extended to the same borrower or
the bonds and shares issued by the same borrower: 12/100 of the
total
assets;
4. The aggregate amount of large-amount credits extended to the same
individual, the same corporation, the same borrower or the same
major
shareholder (including a specially related person to him; the same
shall apply hereafter in this Section) in excess of 1/100
of the total
assets: 20/100 of the total assets;
5. Credits extended to large shareholders and subsidiaries prescribed
INSURANCE BUSINESS ACT
48
by Presidential Decree: 40/100 of the equity capital (in the case that
an amount equivalent to 40/100 of the equity capital is larger
than
an amount equivalent to 2/100 of the total assets, 2/100 of the total
assets);
6. The aggregate amount of bonds and stocks issued by large share-
holders and subsidiaries prescribed by Presidential Decree: 60/100
of the equity capital (in the case that an amount equivalent to 60/100
of the equity capital is larger than an amount equivalent
to 3/100
of the total assets, 3/100 of the total assets);
7. Credits extended to the same subsidiary: 10/100 of the equity capi-
tal;
8. The holding of real estate: 25/100 of the total assets;
9. The holding of unlisted shares (referring to shares that are not listed
or registered on any foreign market similar to the Korea
Stock Ex-
change and the Korea Securities Dealers Association established pur-
suant to the Securities and Exchange Act; hereafter
the same shall
apply): 10/100 of the total assets;
10. The holding of foreign exchange or foreign real estate under the For-
eign Exchange Transactions Act:30/100 of the total assets;
and
11. The aggregate amount of consignment guarantee money for trans-
actions or overseas futures trading prescribed by Presidential
Decree
under Article 105 (2): 5/100 of the total assets.
(2) In the case that it is necessary to enhance the sound operation of
assets and protect policy holders, each ratio of assets operation provided
for in each subparagraph of paragraph (1) may be adjusted
downward
within the scope of 50/100 of the ratio under the conditions as prescribed
by Presidential Decree.
Article 107 (Exception of Restrictions on Operation of Assets)
In the case that the provisions of Article 106 fall under any of
the follow-
ing subparagraphs, the provisions shall not be applied: Provided, That
in the case that any insurance company exceeds
the ratio of assets oper-
ation on the grounds of subparagraph 1, the relevant insurance company
shall bring such excess into conformity
with the provisions of Article 106
within the term of one year from the date on which the excess accrues
(in the case that the
excess falls under the grounds prescribed by Presi-
dential Decree, the Financial Services Commission may extend the term
of one
year by fixing another term):
49
1. Where any change in the price of assets of any insurance company
accrues and any change in the state of assets accrues on the
grounds
that are not incurred by the exercise of security right and the will
of such insurance company; and
2. The case that falls under any of the following items, for which ap-
proval is obtained from the Financial Services Commission:
(a) Where it is necessary for any insurance company to observe the
standards for financial soundness in accordance with Article
123;
(b) Where it is necessary for any insurance company to support its
corporate restructuring, including its debt-for-equity
swap and
financial restructuring, etc. under the Corporate Restructuring
Promotion Act; or
(c) Where it is inevitable for any insurance company to protect the
interests of policy holders.
Article 108 (Setup and Operation of Special Account)
(1) Every insurance company may set up and operate an account (here-
inafter
referred to as the "special account") to use part or whole of its
assets equivalent to the reserve separately from other assets
with re-
spect to insurance contracts falling under each of the following sub-
paragraphs under the conditions as prescribed by
Presidential Decree:
1. Pension savings contract provided for in Article 86-2 of the Restric-
tion of Special Taxation Act;
2. Retirement insurance contract provided for in Article 2 (1) of the
Addenda of the Guarantee of Workers' Retirement Benefits Act
and
insurance contract provided for in Article 16 (2);
3. Amount-variable insurance contract (referring to the insurance con-
tract, whose insurance money changes according to the results
of as-
sets operation); and
4. Other insurance contract that is recognized by the Financial Services
Commission as necessary.
(2) Every insurance company shall perform the accounting of assets be-
longing to the special account separately from assets belonging
to other
special account and other assets.
(3) Every insurance company may distribute profits belonging to the spe-
cial account to policy holders listed on the same account.
(4) Necessary matters concerning methods of operating assets belonging
INSURANCE BUSINESS ACT
50
to the special account, the ratio of assets, the appraisal of assets, the
distribution of profits, the comparison and publication
of the records of
assets operation, the securing of manpower for the operation of assets,
restrictions on the exercise of the voting
right and the protection of policy
holders, etc. shall be prescribed by Presidential Decree.
Article 109 (Prohibition on Equity
Investment in Other Company)
Every insurance company shall be prohibited from holding voting shares
issued by other company in
excess of 15/100 of the total number of such
voting shares (including equity shares): Provided, That the same shall
not apply to
the shares of any subsidiary, the holding of which is ap-
proved (including the case where the holding of such shares are reported
in lieu of approved) by the Financial Services Commission in accordance
with Article 115.
1. The act of swapping its voting shares for the those of other financial
institution or other company to hold them for the purpose
of avoid-
ing the limit on the operation of assets provided for in Articles 106
and 108 or the act of extending credits;
2. The act of swapping its shares for other shares to acquire them for
the purpose of avoiding restrictions on the acquisition of
its own
shares provided for in Article 341 of the Commercial Act and Article
189-2 of the Securities and Exchange Act; and
3. Other act prescribed by Presidential Decree as being feared to greatly
undermine the interests of policy holders.
(2) Every insurance company shall be prohibited from exercising its
voting right on any share acquired in violation of the provisions
of par-
agraph (1).
(3) With regard to any insurance company that has acquired shares or
extended credits in violation of the provisions of paragraph
(1), the Financial
Services Commission may order such insurance company to dispose of the
relevant shares acquired and retrieve
the relevant credits extended and
take other necessary measures against such insurance company.
by Act No. 8863, Feb. 29, 2008>
Article 111 (Prohibition, etc. on Transactions with Large Shareholders)
(1) Every insurance company shall be prohibited from performing
di-
rectly or indirectly the act falling under each of the following subpara-
graphs with any of its large shareholders:
1. The act of extending any credit for the purpose of assisting any large
shareholder in his equity investment in other company;
and
2. The act of transferring any asset without compensation and performing
dealings or exchanges on terms greatly disadvantageous to
the rel-
evant insurance company in light of the conventional terms of trans-
actions.
(2) In the case that any insurance company intends to extend any credit
in excess of the amount prescribed by Presidential Decree
to any large
shareholder or acquire any stock and any bond issued by any large
shareholder in excess of the amount prescribed by
Presidential Decree,
such insurance company shall go through a resolution thereon of the board
of directors in advance. In this
case, the board of directors shall pass
such resolution with the consent of all directors on the register roll.
(3) In the case
that any insurance company performs an act falling
under any of the following subparagraphs with its large shareholders,
such insurance
company shall promptly report the fact to the Financial
Services Commission and put the fact on Internet homepage, etc.: 1. The act of extending any credit in excess of the amount prescribed
by Presidential Decree;
2. The act of acquiring bonds and stocks issued by its large shareholders
in excess of the amount prescribed by Presidential Decree;
or
3. The act of exercising voting right of the stocks issued by its large
shareholders.
(4) Every insurance company shall report to the Financial Services
Commission the matters concerning its extension of any credit
to its
large shareholders and matters concerning its acquisition of bonds and
stocks issued by its large shareholders quarterly
and put the fact on Internet
homepage, etc. as prescribed by Presidential Decree.
52
for his own interest against the interest of such insurance company:
1. The act of asking the relevant insurance company to provide him with
undisclosed material or information for the purpose of exerting
unfair
influence: Provided, That the same shall not apply to the case falling
under the provisions of Article 19 (5) (including
the case where the
provisions are applied mutatis mutandis under the provisons of Ar-
ticle 58);
2. The act of exerting unfair influence on the personnel administration
and management of the relevant insurance company in collusion
with
other shareholders and equity investors on condition that he provides
them with economic interests and other benefits;
3. The act of receiving credits from the relevant insurance company in
excess of the ratio prescribed in Article 106 (1) 4 and 5;
4. The act of urging the relevant insurance company to hold his bonds
and stocks in excess of the ratio prescribed in Article 106
(1) 6; or
5. Other acts prescribed by Presidential Decree as being performed for
the purpose of furthering his own interest as a large shareholder
against the interest of the relevant insurance company.
(6) In cases where sound management of an insurance company may be
substantially
harmed due to the insolvent financial structure, such as
the liability of large shareholders (limited to a company) of the insurance
company exceeds asset, etc., as prescribed by Presidential Decree, the
Financial Services Commission may take measures in the following
subparagraphs against the insurance company: 1. Prohibition from extending new credits to large shareholders;
2. Prohibition from newly acquiring securities issued by large share-
holders; and
3. Other measures prescribed by Presidential Decree, such as restric-
tion on transactions, etc. to supply funds for large shareholders.
Article 112 (Request to Large Shareholders, etc. for Material)
In the case that any insurance company and any large shareholder
are
suspected of violating the provisions of Articles 106 and 111, the Financial
Services Commission may ask the relevant insurance
company and the
relevant large shareholder to submit necessary material.
Article 113 (Prohibition on Debt Guarantee for Other Persons)
INSURANCE BUSINESS ACT
53
Every insurance company shall be prohibited from offering its asserts as
security or as debt guarantee for any other person: Provided,
That the
same shall not apply to the case where any debt guarantee is allowed
under this Act.
Article 114 (Methods of Appraising Assets, etc.)
Necessary matters concerning methods of appraising assets to be ac-
quired or disposed of by any insurance company and restrictions,
etc.
on the issuance of bonds or borrowing of funds shall be prescribed by
Presidential Decree.
SECTION 2 Subsidiaries
Article 115 (Holding of Subsidiaries)
(1) Every insurance company may hold any company that runs the busi-
ness falling under each of the following subparagraphs as its
subsidiary
after obtaining approval from the Financial Services Commission: Provided,
that with respect to any company that runs
the business having a close
relation with the insurance business and prescribed by Presidential Decree,
an insurance company may
hold such company as its subsidiary just after
reporting thereon to the Financial Services Commission: 1. The financial business run by financial institutions in accordance
with the provisions of subparagraph 1 of Article 2 of the Act
on the
Structural Improvement of the Financial Industry;
2. The credit information business provided for in the Use and Protec-
tion of Credit Information Act (excluding the credit evaluation
busi-
ness provided for in subparagraph 11 of Article 2 of the same Act);
3. The business of administering the maintenance, rescission, change
and restoration, etc. of insurance contracts; and
4. Other business that does not undermine the soundness of the insur-
ance business, which is prescribed by Presidential Decree.
(2) Notwithstanding the provisions of paragraph (1) 1, in the case that
any large shareholder of any insurance company is a key
non-financial
player provided for in Article 16-2 (1) of the Banking Act, the relevant
insurance company shall not be allowed to
hold any financial institution
established pursuant to the Banking Act as its subsidiary.
Article 116 (Act Prohibited from being Performed with Subsidiaries)
INSURANCE BUSINESS ACT
54
Every insurance company shall be prohibited from performing the act
falling under any of the following subparagraphs with any of
its subsid-
iaries:
1. The act of transferring any asset without compensation, performing
dealings or exchanges and extending credits on terms greatly
dis-
advantageous to the relevant insurance company in light of the con-
ventional terms of transactions;
2. The act of extending credits using shares held by any subsidiary as
security or extending credits in support of equity investment
in other
company of any subsidiary; and
3. The act of extending loans to officers or employees of any subsidiary
(excluding loans extended in accordance with contract clauses
and
small loans prescribed by the Financial Services Commission).
Article 117 (Obligation of Report on Subsidiaries)
(1) In the
case that any insurance company holds a subsidiary, such
insurance company shall submit the articles of incorporation of such sub-
sidiary and documents prescribed by Presidential Decree to the Financial
Services Commission within seven days from the date on
which it holds
the subsidiary.
CHAPTER ACCOUNTING
Article 118 (Submission of Financial Statements, etc.)
(1) Every insurance company shall close its books on the date prescribed
by Presidential Decree each year and shall submit its financial statement
(including its supplementary details) and business report
to the Financial
Services Commission under the conditions as prescribed by the Financial
Services Commission within three months
from the dateon which such
books are closed.
55
(2) Every insurance company shall submit a report stating details of its
business of every month to the Financial Services Commission
within the
end of the next month under the conditions as prescribed by Presidential
Decree.
(3) Every insurance company may submit the documents referred to in
paragraphs (1) and (2) by means of e-document under the conditions
as prescribed by Presidential Decree.
Article 119 (Keeping of Documents, etc.)
Every insurance company shall keep its financial statement and busi-
ness report provided for in Article 118 (1) at its principal
office, branch
offices and the place of business or offer them for public perusal by means
of e-document from the date on which
such documents are submitted to
the Financial Supervisory Commission.
(3) In the case that it is necessary to properly appropriate the liability
reserve and the emergency-risk reserve referred to in
paragraph (1), the
Financial Services Commission may set accounting standards for the assets
and expenses of every insurance company
and matters prescribed by
Presidential Decree.
(3) Standards for offering dividends to policy holders under paragraph (2)
INSURANCE BUSINESS ACT
56
shall be set taking into account the interests of dividend policy holders
and the financial soundness of insurance companies involved.
Article 121-2 (Divided Accounting on Insurance Contracts other than
Dividend Insurance Contracts)
Where it is necessary for the efficient management of assets and protection
of the insured, insurance companies may divide their
accounting into assets,
or profit and loss for each insurance contract, other than dividend insurance
contracts, upon approval
of the Financial Services Commission, as
prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 8902, Mar. 14, 2008]
Article 122 (Special Case for Using Revaluated Reserve)
In the case
that any insurance company conducts the revaluation of its
assets under the Assets Revaluation Act, the revaluated reserve ac-
cruing from such revaluation may be disposed of for dividends to policy
holders after obtaining permission from the Financial Services
Commission
in addition to the disposal provided for in Article 28 (2) of the Assets
Revaluation Act.
CHAPTER SUPERVISION
Article 123 (Maintenance of Financial Soundness)
(1) Every insurance company shall adhere to the standards for financial
soundness, which are set by Presidential Decree with respect
to the matters
falling under each of the following subapragraphs, to secure its ability
to pay insurance money and the soundness
of its management:
1. Matters concerning the appropriateness of capital;
2. Matters concerning the soundness of assets; and
3. Other matters needed to secure the soundness of management.
(2) In the case that any insurance company is feared to undermine
the
soundness of its management for its failure to adhere to the standards
referred to in paragraph (1), the Financial Services
Commission may order
the relevant insurance company to increase its capital or its fund, and
take necessary steps to limit its
holding of shares and risky assets, etc.
under the conditions as prescribed by Presidential Decree.
Article 124 (Publication, etc.)
(1) Every insurance company shall publish without delay matters pre-
INSURANCE BUSINESS ACT
57
scribed by Presidential Decree as necessary to protect insurance policy
holders under the conditions as prescribed by the Financial
Services
Commission.
(5) In the case that any person other than the insurance association com-
pares and publishes matters concerning insurance contracts,
such person
shall compares and publishes such matters in an objective and fair man-
ner under the conditions as prescribed by the
Financial Services Commission
under paragraph (2).
(1) In the case that any insurance company intends to enter into a mu-
tual agreement with other insurance company to perform their
joint act
for their business, the insurance companies shall obtain authorization
from the Financial Services Commission under the
conditions as prescribed
by Presidential Decree. The same shall apply to the case where they intend
to alter or rescind such mutual
agreement.
(2) The Financial Services Commission may, if it is deemed necessary to
advance public interests and facilitate the sound development
of the
insurance business, order the relevant insurance companies to alter and
rescind their mutual agreement, enter into a new
mutual agreement or
follow the part or whole of their mutual agreement.
8863, Feb. 29, 2008>
(3) The Financial Services Commission shall, if it intends to authorize or
order the conclusion, alteration or rescission of the
mutual agreement under
paragraph (1) or paragraph (2), consult thereabout with the Fair Trade
Commission in advance.
Article 128 (Confirmation of Alteration of Basic Document)
The Financial Services Commission may, if it is deemed necessary, require
the report on the alteration of the basic document to go through the
confirmation of the Financial Supervisory Service when it
receives the
report on the alteration of the basic document, etc. under Article 127.
Article 129 (Principles for Calculating Premium Rates)
Every insurance company shall calculate its premium rates based on
objective
and rational statistical data, prevailing principles and statis-
tical credibility, and observe the matters falling under each of
the fol-
lowing subparagraphs:
1. Premium rates are required not to be too high compared with insur-
ance money and other payments;
INSURANCE BUSINESS ACT
59
2. Premiums rates are required not to be low to the extent that they
greatly undermine the financial soundness of the insurance com-
pany; and
3. Premium rates are required not to be unfairly discriminatory among
policy holders.
Article 130 (Matters to be Reported)
When any of the following causes occurs, an insurance company shall report
to the Financial Services Commission within five days
from the date
when such cause occurred:
1. When it changes its firm name or title;
2. When it appoints or dismisses any officer;
3. When it suspends or resumes the business of its principal office;
4. When the majority shareholder has been changed;
4-2. When there is a change in the number of stocks held by large share-
holders
as many as 1/100 or more of the total voting shares; or
5. When it faces important influence on the performance of its busi-
ness, which is prescribed by Presidential Decree.
Article 131
(Right of Financial Services Commission to Issue Orders)
(1) In the case that any insurance company's inappropriate operation
of
the business and the poor state of its assets are feared to undermine
the rights and interests of policy holders and the insured,
etc., the Financial
Services Commission may order the relevant insurance company to take
the measures falling under each of the
following subparagraphs:
1. Change in the methods of performing the business;
2. Deposit of assets in any institution designated by the Financial Su-
pervisory Commission;
3. Change in the book value of assets;
4. Holding of the reserve to prepare for unsound assets;
5. Writeoff of assets as losses, which are deemed to be valueless; and
6. Other necessary measures prescribed by Presidential Decree.
(2) In the case that any insurance company is feared to greatly under-
mine public interests, the protection of policy holders and the sound
management of any insurance company due to a change in its
business,
the state of its assets and circumstances or its basic document is deemed
to violate Acts and subordinate statutes or
carries contents disadvantageous
to policy holders, the Financial Services Commission may order such
INSURANCE BUSINESS ACT
60
insurance company to alter the basic document or suspend its use after
holding a hearing: Provided, That in the case that the Financial
Services
Commission order minor matters of the basic document changed, such
hearing may not be held.
(4) Notwithstanding paragraph (3), in the case that policy holders, the
insured and any person entitled to receive insurance money
are deemed
to suffer disadvantages without doubt due to the basic document, the
alteration of which is ordered under paragraph
(2), the Financial Services
Commission may have part of the insurance premiums already paid for
concluded insurance contracts refunded
and order the insurance money
increased.
Article 132 (Application)
The provisions of Article 131 (1) shall apply mutatis mutandis to every
local office, every insurance agency and every insurance
brokerage com-
pany. In this case, the "insurance company" shall be deemed the "local
office", the "insurance agency" and the "insurance
brokerage company",
respectively.
Article 133 (Submission of Material and Inspection, etc.)
(1) The Financial Supervisory Commission may order any insurance com-
pany to submit the roll of current shareholders, report the business and
submit material related to the performance of the inspection
provided for
in this Act for the protection of public interests and policy holders, etc.
(2) Every insurance company shall undergo the inspection conducted by
the Financial Supervisory Service with respect to its business
and the
current state of its assets.
(3) The Governor of the Financial Supervisory Service may, when it is
deemed necessary to conduct the inspection referred to in
paragraph (2),
ask any insurance company to report its business and assets, submit ma-
INSURANCE BUSINESS ACT
61
terials and make any person concerned appear to state his opinion.
(4) Any person who conducts the inspection under paragraph (2)
shall
carry a certificate showing his authority and produce it to persons con-
cerned.
(5) The Governor of the Financial Supervisory Service shall, when he
conducts the inspection in accordance with paragraph (2), take
neces-
sary measures depending on the findings of the inspection and report
the findings of the inspection to the Financial Services
Commission.
(6) The Governor of the Financial Supervisory Service may ask any ex-
ternal auditor appointed by any insurance company in accordance
with
the Act on External Audit of Stock Companies to furnish information he
has learned as a result of his audit of the insurance
company and submit
materials related to the management soundness of the insurance com-
pany.
Article 134 (Sanctions against Insurance Company)
(1) The Financial Services Commission may, if any insurance company
is feared
to be unable to run soundly its insurance business in violation
of this Act or orders issued under this Act, take the measures falling
under
each of the following subparagraphs on the recommendation of the Governor
of the Financial Supervisory Service or get the
Governor of the Financial
Supervisory Service to take the measure of subparagraph 1:
1. Caution and warning to the insurance company or caution to officers
and employees of the insurance company;
2. Order given to correct the act of violation;
3. Recommendation for the dismissal of any officer and demand for the
suspension of his office; and
4. Partial suspension of the business for not more than six months.
(2) The Financial Services Commission may, when any insurance
company
falls under any of the following subparagraphs, order its business suspended
in whole for the fixed term of not more than
six months and revoke the
license of its insurance business after holding a hearing:
1. When it has obtained the license of its insurance business by means
of false and illegality;
2. When it has violated contents or terms of the license;
3. When it has run its business during the business-suspension term;
INSURANCE BUSINESS ACT
62
and
4. When it has failed to execute the corrective order given under para-
graph (1) 2.
Article 135 (Notice of Measure Taken Against Retired Officer, etc.)
(1) In the case that an officer or an employee who has retired
or resigned
from any insurance company, if he still works for such insurance com-
pany, would have been subject to the measure
taken in accordance with
Article 134 (1) 1 and 3, the Financial Services Commission may get the
Governor of the Financial Supervisory
Service to inform the head of the
relevant insurance company of contents of such measure.