{"id":130706,"date":"2026-03-06T13:46:12","date_gmt":"2026-03-06T13:46:12","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=130706"},"modified":"2026-03-06T13:46:12","modified_gmt":"2026-03-06T13:46:12","slug":"south-korea-insurance-disputes","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/south-korea-insurance-disputes\/","title":{"rendered":"South Korea: Insurance Disputes"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-130706","comparative_guide","type-comparative_guide","status-publish","hentry","guides-insurance-disputes","jurisdictions-south-korea"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">CHOI &amp; KIM<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2023\/11\/Firm-Logo_Choi-Kim.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">CHOI &amp; KIM<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2023\/11\/Firm-Logo_Choi-Kim.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Insurance Disputes laws and regulations applicable in South Korea<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What mechanism do insurance policies usually provide for resolution of disputes between the insurer and policyholder?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Insurance policies issued in the Korean insurance market designate almost without exception Korean law as the governing law and the courts of Korea as the jurisdiction. Reinsurance disputes are also generally governed by Korean law and resolved by Korean courts. In disputes of a specialised or international nature such as reinsurance disputes involving complex technical issues, there are cases where the parties agree to resolve disputes through ad hoc arbitration agreed upon after the dispute arises.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a protocol governing pre-action conduct for insurance disputes?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Unless there is a specific provision in the insurance policy, there is no mandatory pre-action protocol that must be followed prior to commencing litigation.\u00a0 Once a complaint is filed with the court, it is standard practice for parties to exchange written submissions before oral hearings are conducted in court. Through this process, the issues are clarified and evidence is examined and verified. In this sense, a form of pre-action conduct is effectively carried out through written exchanges during the early stage of litigation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are local courts adept at handling complex insurance disputes?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Insurance disputes have long been resolved in Korean courts, and a substantial body of appellate precedents is available to guide the lower courts. Because Korea has an export-oriented and internationally open economy, Korean courts frequently handle complex, specialised, and high-value international disputes. In particular, the Seoul Central District Court has established two specialised international divisions dedicated to handling international disputes. Based on practical experience, the Seoul Central District Court is regarded as adjudicating cases faithfully in accordance with legal principles without bias toward any particular country.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is alternative dispute resolution mandatory?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Dispute resolution through arbitration or civil mediation is frequently used. However, in the absence of any policy provisions, such procedures are not mandatory and are undertaken at the voluntary election of the parties.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are successful policyholders entitled to recover costs of insurance disputes from insurers?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Where disputes are resolved through court proceedings, the successful party may recover part of its legal costs from the losing party. However, recoverable costs are not based on actual costs incurred. Instead, they are calculated in accordance with Korean Supreme Court rules based on the amount in dispute, to the extent that the recoverable costs do not exceed the actual costs incurred. These rules are structured such that the recovery rate decreases as the amount in dispute increases. In practice, the amount recoverable is relatively modest.<\/p>\n<p>For example, where the amount in dispute is USD 1,000,000 and the policyholder succeeds at all three levels of court, recoverable costs (including legal fees) would be approximately USD 41,000, to the extent that they do not exceed the actual costs incurred.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there an appeal process for court decisions and arbitral awards?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A losing party may appeal court decisions as of right up to the Supreme Court (the highest level of court) and no permission from the court is required.<\/p>\n<p>For foreign arbitral awards, a losing party may challenge:<\/p>\n<ul>\n<li>by seeking annulment in the courts of the seat of arbitration; or<\/li>\n<li>by opposing recognition and enforcement in Korea.<\/li>\n<\/ul>\n<p>Korea is a contracting state to the 1958 New York Convention, and recognition and enforcement of arbitral awards from contracting states are governed accordingly. For awards from non-contracting states, recognition and enforcement require a court judgment under the Korean Civil Procedure Act.\u00a0 In such cases, reciprocity is an important consideration.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How much information is the policyholder required to disclose to the insurer? Does the duty of disclosure end at inception of the policy?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Korean law, the duty of disclosure applies to \u201cmaterial facts.\u201d A material fact is a fact relating to risk that would influence the insurer\u2019s decision whether to enter into the contract or the terms on which it would do so. In practice, insurers provide questionnaires, and policyholders respond accordingly. Matters included in written questionnaires are legally presumed to be material. Korean courts generally interpret questionnaires as encompassing all material facts. The duty of disclosure applies at inception of the policy.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What remedies are available for breach of the duty of disclosure, and is the policyholder\u2019s state of mind at the time of providing the information relevant?\u202f\u202f\u202f\u202f\u202f\u202f<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>If the policyholder breaches the duty of disclosure intentionally or through gross negligence, the insurer may terminate the policy. Breach includes both non-disclosure and misrepresentation. If there is a causal relationship between the breach and the insured event, the insurer would be entitled to deny coverage, in addition to termination of policy. If there is no causal relationship, the insurer cannot deny liability for the loss. Termination must be exercised within one month of discovering the breach and not later than three years from policy inception. The insurer bears the burden of proving intent or gross negligence.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are certain types of provisions prohibited in insurance contracts?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Korean Commercial Act distinguishes between personal insurance and corporate insurance. In personal insurance, statutory provisions in the Korean Commercial Act are mandatory, and policy terms unfavourable to the policyholder that conflict with statutory provisions are invalid. In corporate insurance, including reinsurance and marine insurance, freedom of contract applies, and policy terms inconsistent with statutory provisions may be valid. In both cases, provisions contrary to public order are prohibited.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">To what extent is a duty of utmost good faith implied in insurance contracts?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Scholars generally consider that the duty of utmost good faith under the UK Marine Insurance Act 1906 no longer applies under Korean law. Instead, it has been replaced by a general duty of good faith. The duty of utmost good faith is therefore no longer applied as an implied interpretive principle. However, the duty of good faith remains an important principle in interpreting duties such as disclosure and notification of increased risk.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do other implied terms arise in consumer insurance contracts?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Insurance contracts are generally concluded in standard form due to their technical nature. Under the Korean Act on the Regulation of Standardised Terms and Conditions, ambiguous terms are interpreted in favour of the policyholder. Korea follows a statutory law system rather than a common law system. Accordingly, statutory provisions take priority in interpretation, and no implied terms arise automatically in insurance contracts. However, statutory provisions are interpreted in a manner protective of policyholder in accordance with the principle of good faith.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there limitations on insurers\u2019 right to rely on defences in certain types of compulsory insurance, where the policy is designed to respond to claims by third parties?\u202f\u202f<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Korea is a contracting state to the International Convention on Civil Liability for Oil Pollution Damage (CLC), which has been implemented through domestic legislation under the Compensation for Oil Pollution Damage Guarantee Act of Korea.<\/p>\n<p>Under Article VII.8 of the CLC, insurers may be restricted from relying on certain policy defences against third-party claimants in oil pollution cases: \u201c<em>8. Any claim for compensation for pollution damage may be brought directly against the insurer or other person providing financial security for the owner&#8217;s liability for pollution damage. In such case<\/em><em>, t<\/em><em>he defendant may avail himself of the defence that the pollution damage resulted from the wilful misconduct of the owner himself, but <\/em><strong>the defendant shall not avail himself of any other defence<\/strong> <em>which he might have been entitled to invoke in proceedings brought by the owner against him<\/em>\u2026\u201d<\/p>\n<p>Accordingly, in the cases of an oil pollution incident to which the CLC applies, the insurer\u2019s ability to rely on defences arising under the insurance contract may be restricted to the extent as prescribed in Article VII.8.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the usual trigger for cover under insurance policies covering first party losses, or liability claims? Are there limitation periods for the commencement of an action against the insurer?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under liability insurance, the insured\u2019s right to claim insurance proceeds does not arise at the time of the insured event (i.e., the occurrence of damage to the victim), but rather at the time when the liability of the insured, who is the tortfeasor, is determined by payment, admission, settlement, or judgment. Under Korean law, the limitation period applicable to the insured\u2019s claim for insurance proceeds and the limitation period applicable to a third party\u2019s direct claim against the insurer must be distinguished. In liability insurance, the third-party victim may exercise a direct right of action against the liability insurer.<\/p>\n<p>The limitation period applicable to a claim for insurance proceeds by a policyholder under liability insurance is three years that begins to run from the time when the insured becomes entitled to exercise the right to claim insurance proceeds based on the triggering event, namely when the insured\u2019s liability to the third party is determined by payment, admission, settlement, or judgment. On the other hand, the limitation period applicable to a direct claim for the third-party against the liability insurer differs. Under Korean law, the courts take the position that the legal nature of the third party\u2019s claim against the liability insurer is not a claim for insurance proceeds, but rather a claim for damages. Accordingly, the limitation period applicable to a third party\u2019s direct claim against the liability insurer is the same as that applicable to general tort claims, namely three years from the date on which the victim became aware of both the damage and the tortfeasor (i.e., the insured), or ten years from the date of the tort, whichever occurs first.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Which types of loss are typically excluded in insurance contracts?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Exclusions from coverage consist of statutory exclusions prescribed under the Korean Commercial Act and exclusions provided under individual policy terms and conditions. In the case of personal insurance, any exclusion clause that contravenes the provisions of the Korean Commercial Act is deemed invalid. However, in the case of corporate insurance, exclusion clauses are generally considered valid even if they conflict with or expand upon the statutory exclusions set out in the Korean Commercial Act.<\/p>\n<p>The statutory exclusions under the Korean Commercial Act include, among others, (1) exclusion of loss caused by the wilful misconduct or gross negligence of the policyholder, (2) exclusion of loss caused by war, revolution, civil commotion, insurrection, or riot, and (3) exclusion of loss arising from the inherent nature, defect, or natural wear and tear of the insured property. Exclusions under policy terms and conditions may include, for example, (1) exclusion for fraudulent claims, (2) exclusion under claims-made policies where the insured fails to notify circumstances that may give rise to a claim during the policy period, and (3) exclusion under D&amp;O insurance for fines or penalties imposed due to violations of applicable law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do the courts typically construe ambiguity in policy wordings in favour of the insured?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. The principle of <em>contra proferentem <\/em>is recognised both in case law and under the Act on the Regulation of Standardised Terms and Conditions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does a \u2018but for\u2019 or \u2018proximate\u2019 test of causation apply, and how is this applied in wide-area damage scenarios?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Korean law, causation is generally explained as being governed by the doctrine of reasonable causation. Reasonable causation means that causation is recognised where it is considered reasonable to do so, based on a flexible and comprehensive assessment of all relevant circumstances, including the wording of the policy and the nature and circumstances of the insured event. Although the concept of proximate cause under English law is discussed as being different theoretically from the doctrine of reasonable causation under Korean law, in practice there is generally no significant difference in the outcome of their application based on practical experience.<\/p>\n<p>In cases involving wide-range damage, the existence of causation must ultimately be determined in accordance with common sense and experiential principles, taking into account the background and purpose of the insurance contract, the wording of the policy, and the circumstances surrounding the occurrence of the insured event, in line with the doctrine of reasonable causation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the legal position if loss results from multiple causes?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Where multiple causes all constitute insured perils, there is no issue with coverage. If an insured peril and an uninsured peril concur to cause the insured event, causation will still be recognised under Korean law where the insured peril constitutes a significant and effective cause of the loss, even if an uninsured peril also contributed as a concurrent cause. In this context, a \u201csignificant cause\u201d does not need to be the sole or decisive cause of the loss. The determination of causation must necessarily be made on a case-by-case basis in light of the specific facts and circumstances.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What remedies are available to insurers for breach of policy terms, including minor or unintentional breaches?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>This depends on policy interpretation. The general view is that minor or unintentional breaches do not affect coverage.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Where a policy provides cover for more than one insured party, does a breach of policy terms by one party invalidate cover for all the policyholders?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Whether a breach of policy terms by one insured invalidates cover for all insured parties is a matter of policy interpretation, namely, by comprehensively considering the type of insurance contract and the nature and content of the breach. In the absence of a specific clause providing otherwise, Korean case law interprets breaches as applying individually to each insured.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Where insurers decline cover for claims, are policyholders still required to comply with policy conditions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Korean law, where an insurance contract is validly terminated during the policy period, in the absence of a specific provision in the policy, Korean scholars interpret the effect of termination as operating prospectively (i.e. non-retrospectively). Accordingly, the insurer is not required to return premiums corresponding to the period that has already elapsed and is entitled to claim any unpaid premium accrued up to the date of termination.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is quantum assessed, once entitlement to recover under the policy is established?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Korean law, insurance proceeds are, in principle, assessed based on the value of the insured property at the time and place of the loss. However, the scope of cover may be varied in accordance with the policy wording. Once entitlement is established, the recoverable loss is calculated on the basis of objective evidence, limited to losses that fall within the insured risks and for which reasonable causation is recognised. In litigation, the court typically appoints an independent expert appraiser to determine the amount of insured loss. Although the court is not formally bound by the court-appointed expert\u2019s opinion, it is generally expected to accord it substantial weight.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Where a policy provides for reinstatement of damaged property, are pre-existing plans for a change of use relevant to calculation of the recoverable loss?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In general, the insured\u2019s subjective intention to change the use of the property is not taken into account. However, policy provisions expanding the coverage scope in order to ensure the practical effectiveness of insurance compensation are valid, including provisions reflecting objective changes in circumstances such as changes in the applicable laws or regulations. For example, where reinstatement must comply with strengthened building requirements introduced after policy inception, such as mandatory installation of sprinklers in high-rise buildings, cover may be available under a Public Authorities Clause. In addition, where the insurer agrees to indemnify on a replacement value basis, a \u201cnew for old\u201d clause providing for compensation based on the cost of new property rather than second-hand value is valid.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">After paying claims, are insurers able to pursue subrogated recoveries against third parties responsible for the loss? How would any such recoveries be distributed as between the insurer and insured?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Korean law, subrogation is recognised in non-life insurance. Where recovery is obtained from a liable third party, Korean case law dictates that the recovered amount is first allocated to the insured\u2019s uninsured loss, such as the deductible. Any remaining balance after full compensation of the uninsured portion is then distributed to the insurer.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a right to claim damages in the event of late payment by an insurer?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. If the insurer delays payment of a valid insurance claim, the policyholder may claim default interest at the statutory rate of 6% per annum. If the dispute is resolved by judgment, a higher rate of 12% per annum applies from the date of judgment as a form of statutory delay interest. However, punitive damages are not recognised under Korean law in respect of an insurer\u2019s delay in payment of insurance proceeds.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can claims be made against insurance policies taken out by companies which have since become insolvent?\u202f<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The insolvency of the policyholder does not affect the rights of an injured third party against the insurer. In liability insurance, such as D&amp;O or product liability insurance, a victim may exercise rights under the policy against the insurer even if the policyholder has become insolvent. Under Korean law, a third party\u2019s direct right of action against a liability insurer is characterised not as a claim for insurance proceeds, but as a claim based on the insurer\u2019s overlapping assumption of the insured\u2019s liability to compensate the victim. The insurer may raise against the third party any defences that it could have asserted against the insured under the policy. However, the insured\u2019s insolvency itself does not constitute a defence against the third party.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">To what extent are class action or group litigation options available to facilitate bulk insurance claims in the local courts?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Korean law, class actions are recognised only on a limited basis in securities-related damages litigation that they are not available in insurance disputes. Where there are multiple parties, the Korean Civil Procedure Act provides for joint litigation: the parties may appoint a common legal representative (usually, by the initiative of legal counsel wherein the claimants do not share a close relationship among them) or designate a representative party authorised to conduct binding proceedings on behalf of others, thereby streamlining the procedure.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the biggest challenges facing the insurance disputes sector currently in your region?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>One of the most significant challenges in insurance disputes in Korea arises from the \u201cDuty to Explain\u201d policy terms under the Act on the Regulation of Standardised Terms and Conditions. If material policy provisions are not explained in detail and in a manner understandable to the policyholder, the binding effect of those provisions may be denied. The doctrine invalidating policy clauses on the basis of breach of the Duty to Explain is an unusual regulatory feature specific to Korea. Judicial statistics indicate that the reversal rate in Supreme Court appeals based on breach of the Duty to Explain is approximately 30%, which is higher than the general reversal rate in civil appeals, typically between 3.5% and 5.5%. Whether the Duty to Explain has been fulfilled depends on the specific factual circumstances and the evidence presented at trial. The burden of proving compliance rests with the insurer. Practitioners recognise that it is often impossible to predict the final outcome without litigating the matter to the end.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do you envisage technology affecting insurance disputes in your jurisdiction in the next 5 years?\u202f\u202f<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Artificial intelligence is expected to be widely utilised in insurance operations in the coming years. Insurers are likely to adopt AI very actively in order to enhance efficiency and reduce transaction costs. However, the use of AI is expected to increase uncertainty beyond statistically measurable risk, thereby generating new types of insurance disputes. Potential issues include algorithmic discrimination at the underwriting stage, data protection and privacy concerns, insufficient understanding of AI-based sales processes or technical failures during marketing, and operational risks such as algorithmic errors or data malfunction at the claims stage. The use of identical algorithms may lead to collective group losses and exacerbate information asymmetry between insurers and policyholders.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the significant trends and developments in insurance disputes within your jurisdiction in recent years?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>One of the most distinctive current insurance disputes in Korea concerns medical expense indemnity insurance, commonly referred to as \u201cactual loss\u201d insurance. This type of insurance covers non-reimbursed medical expenses not covered by Korea\u2019s public health insurance system. It is highly popular, with approximately 40 million subscribers out of total population of 51 million. The problem is that misuse and abuse driven by moral hazard among insureds and medical providers have become serious. Disputes frequently arise where cosmetic procedures are disguised as medical treatment, treatment frequency or costs are grossly inflated, or procedures performed by unqualified individuals are claimed as medical expenses. Insurers have responded by filing criminal complaints and civil actions against policyholders and medical practitioners involved in fraudulent or excessive claims, but improper claims remain prevalent.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Where in your opinion are the biggest growth areas within the insurance disputes sector? \u202f<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The largest growth area in insurance disputes is liability insurance. Traditionally, disputes in this field concern the existence and scope of the insured\u2019s liability to victims. As Korea has pursued rapid export-led economic growth, product liability and recall insurance disputes relating to exported goods have increased. The expansion and modernisation of corporate activities have also led to a significant rise in D&amp;O disputes arising from alleged violations of competition and antitrust laws.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">3597<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/130706","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=130706"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}