Litigation Against Insurance Companies

As the most common form of litigation against an insurance company, where the policyholder has claimed payment of insurance proceeds but the insurer refuses it or pays only a portion, the policyholder may claim the insurance proceeds through a civil lawsuit.

Where an insurance company asserts the invalidity of the insurance contract on grounds such as a breach of the duty of disclosure at the time the contract was concluded and refuses to pay insurance proceeds, the policyholder may file a lawsuit to confirm that the contract is valid.

Where an insurance company causes harm to the policyholder in the course of intentionally or negligently delaying or refusing payment of insurance proceeds, a separate lawsuit claiming damages is also possible.

Where insurance fraud is suspected in the course of claiming insurance proceeds and criminal proceedings are initiated, a complex procedure may arise in which one must respond to those proceedings while also asserting the payment of insurance proceeds in civil terms.

▶Competent authority: Financial Dispute Mediation Committee of the Financial Supervisory Service

▶How to apply for dispute mediation

-Submission channels: Financial Civil Complaint Center (internet, mail, fax, in person)
-Required entries: applicant information, the opposing insurance company, and the substance of the dispute (described according to the Five Ws and One H)

▶Mediation procedure

Filing of complaint → notification of receipt by text message
Investigation and request for materials
Recommendation of settlement → referral to the mediation committee if not complied with
Mediation committee presents a mediation proposal → decision on acceptance within 20 days
When both parties accept, it takes effect equivalent to a "judicial settlement"

▶Points to note

-If a lawsuit is filed before the application, the mediation procedure may be omitted
-For disputes of ordinary financial consumers involving 20 million won or less, filing a lawsuit is prohibited until the mediation proposal is presented (exceptions apply)
-The mediation procedure may be suspended for cases under litigation

▶Competent authority: Consumer Dispute Mediation Committee of the Korea Consumer Agency

▶Subject of mediation: disputes between insurance companies and consumers (consumers may apply for relief from harm)

▶Mediation procedure

Filing of complaint (using the counseling center)
Recommendation of settlement (referral to the committee if the settlement is not complied with within 30 days)
The mediation committee prepares a mediation proposal (generally 30 days, extendable)
When the parties accept, it takes effect as a "judicial settlement"
If no objection is raised within 15 days, acceptance is deemed automatic

▶Subject of mediation: disputes concerning postal savings and insurance, such as contracts, payment, cancellation, and interpretation of terms and conditions

▶Mediation procedure

Receipt of application → decision on whether to refer to a meeting
The meeting may be omitted in cases such as a filing of suit in court or a lack of practical benefit
Supplementation may be requested
Deliberation and mediation (within 60 days)
Notification of the mediation proposal and guidance on the result
It takes effect when both parties accept

Before pronouncing a formal judgment, the court may issue a decision recommending settlement during the preparatory pleading procedure or the pleading procedure, without separately setting a mediation date.

This decision has the same effect as a judicial settlement when the parties do not raise an objection, and it is used as a means for the swift resolution of simple disputes.

There is also a method of resolving a dispute through the court's civil conciliation procedure.

Civil conciliation begins when one of the parties applies to the court for conciliation, or when the judge hearing the case refers it to conciliation on the judge's own authority.

When an agreement is reached between the parties, a conciliation protocol is prepared, and it carries the same legal effect as a judicial settlement.

On the other hand, where no agreement is reached between the parties, where the content of the agreement is judged to be inappropriate, or where the respondent does not appear on the conciliation date, the court may issue a decision in lieu of conciliation on its own authority.

The first step is to send a content-certified letter formally requesting the insurance company to pay the insurance proceeds.

Through this process, one can confirm the insurance company's position once again, and in some cases the dispute ends through an amicable settlement.

Because a no-suit agreement clause may be included in the settlement process, it is necessary to review whether such a clause fundamentally bars the possibility of filing a lawsuit later, and it is advisable to obtain the assistance of a civil litigation attorney.

To determine whether a claim for insurance proceeds is possible in a given case, one must first closely analyze related materials such as the insurance contract, the terms and conditions, the claim form for insurance proceeds, the medical certificate, and the statement of accident circumstances.

In particular, because special clauses or exclusion provisions in the terms and conditions are often at issue, careful review is necessary.

When filing a lawsuit, one must clearly organize the purpose of the claim (the amount of insurance proceeds claimed) and the cause of the claim (the cause giving rise to the obligation to pay insurance proceeds).

In this process, one must comprehensively consider the type of contract, the nature of the insured event, and the interpretation of the insurance terms and conditions.