【Holding】
[1] Matters to be considered in order to interpret standardized terms fairly and reasonably
[2] In a case where A insurance company concluded with B local government a public officials' group accident insurance contract including a special clause on actual medical expenses; thereafter C, a public official of B local government, was injured in a traffic accident and received, as a settlement, insurance proceeds including future medical expenses, etc. from D insurance company, the insurer of the at-fault vehicle; the Government Employees Pension Service, which had been paying C medical care expenses for official duty in connection with the accident, demanded that C return the amount corresponding to future medical expenses out of the medical care expenses for official duty on the ground of the payment of the above insurance proceeds; and C, after returning it to the Government Employees Pension Service, sued A company for payment of actual medical expense insurance proceeds for the returned amount, the Court held that, even if C returned to the Government Employees Pension Service the medical care expenses for official duty corresponding to future medical expenses because C had received insurance proceeds including future medical expenses from D company, it cannot be regarded as a portion actually borne by C, the insured, or as a loss to be compensated under the insurance contract; nevertheless, the lower court erred in its misapprehension of legal principles, etc. by holding otherwise that A company was obligated to pay insurance proceeds
【Summary of Decision】
[1] Standardized terms should be interpreted fairly and reasonably in accordance with the principle of good faith, taking into account the purpose and intent of the terms, and should be interpreted objectively and uniformly based on the understanding of the average customer, without regard to the purpose or intent of the individual contracting parties. In order to interpret a particular clause of standardized terms fairly and reasonably, absent special circumstances, not only the meaning of the wording of the clause itself but also the meaning the clause has within the overall logical context should be considered.
[2] In a case where A insurance company concluded with B local government a public officials' group accident insurance contract including a special clause on actual medical expenses; thereafter C, a public official of B local government, was injured in a traffic accident and received, as a settlement, insurance proceeds including future medical expenses, etc. from D insurance company, the insurer of the at-fault vehicle; the Government Employees Pension Service, which had been paying C medical care expenses for official duty in connection with the accident, demanded that C return the amount corresponding to future medical expenses out of the medical care expenses for official duty on the ground of the payment of the above insurance proceeds; and C, after returning it to the Government Employees Pension Service, sued A company for payment of actual medical expense insurance proceeds for the returned amount, the Court held as follows: considering the wording and meaning of the special clause on actual medical expenses in the insurance contract, the provisions of the relevant statutes on benefits of the Government Employees Pension Service, the nature of the insured subject covered by the special clause, etc., the special clause is properly regarded as covering the portion of medical care expenses for official duty that is legitimately calculated under the relevant statutes and ultimately borne and disbursed by the insured himself or herself; the portion of benefits not paid by the Government Employees Pension Service to the extent that a third party has already compensated the beneficiary for damages arising from the same cause cannot be regarded as a portion borne by the insured, and the same applies where the Government Employees Pension Service, overlooking the third party's compensation for damages, paid benefits for the same cause and later had them returned; and since the portion of future medical expenses in the settlement C received from D company was paid as compensation for damages for C's medical expenses, even if C returned to the Government Employees Pension Service the medical care expenses for official duty corresponding to such future medical expenses, it cannot be regarded as a portion actually borne by C, the insured, or as a loss to be compensated under the insurance contract; nevertheless, the lower court erred in its misapprehension of legal principles, etc. by holding otherwise that A company was obligated to pay insurance proceeds.
【Referenced Statutes】
[1] Article 5 of the Act on the Regulation of Terms and Conditions (the “Terms and Conditions Act”, 약관법) [2] Article 5 of the Terms and Conditions Act; Article 665 of the Commercial Act; Article 33 of the former Public Officials Pension Act (before being wholly amended by Act No. 15523, Mar. 20, 2018) (see Article 21 of the current Public Officials' Accident Compensation Act)
【Referenced Precedents】
[1] Supreme Court Decision 2014Da232784, October 25, 2018 (Gong2018Ha, 2201)
Supreme Court Decision 2023Da283913, January 25, 2024 (Gong2024Sang, 469)
(Source: Supreme Court Decision 2023Da282927, August 12, 2026 | Judicial Information Disclosure Portal, Precedents)
2026. 10. 14. · By Attorney Dongwoo Shin
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