An Analysis of the Controversial Exclusion Clauses under Korean Automobile Insurance Policy

Abstract

The interpretation of the Supreme Court that the exclusion clause of unlicensed driving cannot be applied to the case where there is consent of the approved insured only may leave room for criticism. It is submitted that the Supreme Court neglected the principle of the insurance law on the exclusion clause of unlicensed driving. The interpretation of it shall be interpreted more flexibly. Accordingly, as regards the

case where the control or management of the insured was possible, it shall be interpreted it as including all situations with the cases under the control or management of the registered insured, approved insured and persons driving vehicles for them. In other words, if unlicensed driving was done under the express or implied consent of the registered insured, approved insured or drivers for them, the exclusion clause of

unlicensed driving should be applied, depending on the detailed situation. The reason is that they all are in the position of insured under the automobile insurance policy, and persons in such positions would

have the obligation not to permit driving by an unlicensed driver. According to the current provisions of Article 732-2 and Article 633 of Commercial Law, it has to be interpreted as an imperative provision that

does not permit exclusion of the insurer's liability on grossly negligent accidents in personal accident insurance. However, there is a need of re-review of Article 633 that makes the relatively imperative provision for Article 732-2 of Commercial Law due to several problems including the possibility of

unconstitutionality. Namely, unlike the current legal provision, the relatively imperative regulation should be made only in cases needed individually for each relevant article and shall review the ways to exclude

Article 732-2 of Commercial Law from the subject of relative imperative provision.