A Study on the Rational Solution of Immediate Annuity Issues through the Precedent Analysis

Abstract

In the disputes over immediate annuity insurance, the court's judgments of the first and second instances related to the insurer's duty to explain are presented. The disputes began in 2017, and the Financial Supervisory Service's Dispute Mediation Committee recommended that all inherited annuity products(maturity refund type) subscribers pay additional underpaid insurance, but insurers refused to pay collectively except for the mediation case. According to the precedents that consumers have won so far, insurers should specify the risks that “insurers can pay less than the minimum guaranteed rate at the time of the fall in interest rates” and “the monthly pension amount shall be paid after deducting the reserves for financing the maturity refund” in the terms and conditions. In addition, on the basis that the insurance company did not explain this to the customer, the court applied Article 3, Paragraph 4 of Act on the Regulation of Terms and Conditions to invalidate the incorporation into the contents of the insurance contract. Furthermore, the court orders the insurance company to pay the difference to the consumer based on the difference from the minimum guaranteed interest rate or the initial annuity insurance money (the amount without deducting the accumulated amount for the maturity refund fund). In this study, it was considered reasonable to apply Article 102 of the Old Insurance Business Act (current Articles 44 and 45 of Act on the Protection of Financial Consumers) rather than applying Article 3, Paragraph 4 of Act on the Regulation of Terms and Conditions when the insurer violates the duty of explanation. Also, the policyholder's negligence offset can be applied individually, and fairness can be established in accounting for unpaid insurance money. Moreover, in the immediate annuity insurance case, policyholders recognized that the insurer had violated the duty of explanation only after the monthly annuity less than the minimum guaranteed interest rate was paid. The question is whether to view it as the payment date of the monthly annuity of the company or as the time when the existence of the right to claim insurance money was known. In the judgments related to immediate annuity that have been issued so far, the position is that an insurer who refuses to pay insurance loses the lawsuit and that it is unacceptable as an abuse of rights against the principle of good faith that the statute of limitations for claiming insurance has expired. The Supreme Court precedent regarding accidental death benefit considered more emphasis on the pursuit of legal stability, refusing to recognize restrictions based on the principle of good faith, and strictly interpreting the extinctive prescription period. Presumably, the short-term limitation of three years (2 years in most cases subject to immediate annuity) applies to the right to claim insurance money, and it is difficult for general consumers to understand that they must file a claim in court to stop the extinctive prescription period. When the insurer refuses to pay the insurance money, the consumer believes the insurer's words and in most cases gives up on the claim, and even after a court judgment has been issued and the insurance claim is subject to the extinctive prescription period, the claim is frustrated again. Seems to be a very unreasonable result for consumers in. It is necessary to avoid the attitude of omitting key points and not explaining them in detail by delegating specific details to complex and difficult product terms and conditions. I think it's time to listen to the alternative of applying subjective starting points to insurance claims subject to short-term limitation period.