Suggested citations
AGLC4 | 보험법 2015 [Insurance Law of the Democratic People's Republic of Korea (2015)] [tr Daye Gang].
Bluebook | Boheombeob 2015 [Insurance Law of the Democratic People's Republic of Korea (2015)] translated in Law and North Korea by Daye Gang, https://www.lawandnorthkorea.com/.
Adopted on April 6, Juche 84 (1995), as Decision No. 58 of the Standing Committee of the Supreme People’s Assembly
Amended on February 4, Juche 88 (1999), as Directive No. 383 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on May 16, Juche 91 (2002), as Directive No. 3038 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on September 13, Juche 94 (2005), as Directive No. 1298 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on December 16, Juche 97 (2008), as Directive No. 2989 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on April 8, Juche 104 (2015), as Directive No. 456 of the Presidium of the Supreme People’s Assembly
CHAPTER I. BASICS OF INSURANCE LAW
Article 1 (Objectives of Insurance Law)
The Insurance Law of the Democratic People’s Republic of Korea shall strictly adopt systems and order in insurance work to protect the rights and interests of parties to insurance and shall serve the economic development of the country and the stability of people’s standard of living.
Article 2 (Definitions)
The definitions of terms in this law are as follows.
1. Insurance is a damage compensation system that societally creates and uses funds to compensate damage to people and property because of natural disasters or unexpected accidents.
2. Insurable interest is an economic interest held by an insured person for an insured subject.
3. An insurance accident is a thing where a danger guaranteed in the insurance contract by the insurer becomes reality.
4. An insurer is the insurance company that pays insurance money or insurance compensation when there has been an insurance accident.
5. An insured party is an institution, enterprise, organization or individual person that receives insurance money or insurance compensation when there has been an insurance accident.
6. A policyholder is an institution, enterprise, organization or individual person who has the duty to pay insurance premiums according to the insurance contract.
7. An insurance beneficiary is a person who receives insurance money from personal insurance when an insured person dies.
8. An insurance premium is funds received from a policyholder in exchange for the insurer guaranteeing the danger caused to the insured subject.
9. Insurance money is funds paid from personal insurance by the insurer to the insured person when the insurance period expires or an insurance accident occurs.
10. Insurance compensation is funds paid from property insurance by the insurer when an insurance accident occurs.
11. An insurance period is the time when the responsibility of the insurer starts to when it ends, being the period that an insurance contract has legal effect.
12. Legal liability insurance is insurance where the insurer compensates damage an insured person causes to a third party because of an insured accident.
13. Reinsurance is insurance where the whole or a part of the danger guaranteed by an insurance company is guaranteed again by a different insurance company.
Article 3 (Classification of insurance)
Insurance shall be divided into personal insurance and property insurance according to the insured subject. Personal insurance includes things such as life insurance, accident insurance, children’s insurance, and passenger insurance, and property insurance includes things like fire insurance, marine insurance, agricultural insurance, technical insurance, car insurance, credit insurance, legal liability insurance, and warranty insurance.
Article 4 (Principle of voluntariness, obligation, credit, institution determining insurance types and compulsory insurance subjects)
The State shall ensure that insurance parties accurately keep the principle of voluntariness, obligation, and credit in conformity with voluntary insurance and compulsory insurance. The work of creating a new insurance type or determining subjects of compulsory insurance shall be done by the Cabinet.
Article 5 (Entity in charge of insurance work)
Insurance work in the territory of our country shall be done by an insurance company that has received the approval of the central insurance guidance institution. In special economic zones, foreign investors and overseas Korean compatriots may establish and operate an insurance company, and insurance companies of other countries may establish and operate missions, branch offices, and agencies.
Article 6 (Principle of purchasing insurance)
In cases where institutions, enterprises and organizations, citizens or foreign country institutions, foreign country investment enterprises, foreigners, or overseas Koreans purchase insurance, the State shall ensure that they purchase insurance from an insurance company inside the territory of our country.
Article 7 (Exchange and cooperation in the insurance field)
The State shall develop exchange and cooperation in the insurance field with other countries and international organizations. International conventions in the insurance field that the Democratic People’s Republic of Korea has ratified shall have the same legal effect as this law.
Article 8 (Restriction of application of law)
This law shall not be applied to social insurance executed as a measure of the State.
CHAPTER II. INSURANCE CONTRACTS
Article 9 (Insurance contracts and status of parties)
Insurance contracts are the foundation of insurance activities. Parties to insurance must conclude insurance contracts from equal statuses and must correctly fulfil them.
Article 10 (Parties to insurance contracts)
Insurance contracts shall be concluded between the insurer policyholder in writing. A policyholder can be the insured person or a person who concludes an insurance contract for an insured person.
Article 11 (Insurable interest)
Insurance contracts may be concluded only if there is an insurable interest in an insured subject. Insurance contracts concluded without an insurable interest shall not have legal effect.
Article 12 (Method of entering into insurance contract)
When concluding insurance contracts, policyholders shall submit to the insurer an insurance contract application document that correctly states the particulars to fill out, and must truthfully respond to the questions of the insurer related to the insured subject. An insurer must produce the insurance contract standard conditions to the policyholder and must explain its key contents.
Article 13 (Point of establishment of insurance contract)
An insurance contract shall be established at the time the insurer consents to the insurance contract application of the policyholder and publishes the insurance policy. The form and content of an insurance policy shall be determined by the insurance company and shall receive the approval of the central insurance guidance institution.
Article 14 (Particulars to be stated on insurance policy)
The following particulars shall be stated on an insurance policy.
1. The name and address of the policyholder
2. The name and address of an insured person
3. The insured subject
4. The insurance price
5. The insurance amount
6. Dangers insured and dangers not insured
7. The insurance period
8. Insurance premiums and their payment methods
9. Payment method of insurance money or insurance compensation
10. Other particulars agreed by the insurer with the policyholder
Article 15 (Duties of insurance contracting parties)
When an insurance contract is established, policyholders shall have a duty to pay insurance premiums, and insurers shall have a duty to pay insurance money or insurance compensation.
Article 16 (Payment of insurance premium)
Policyholders must pay the insurance premium pointed out in the insurance policy within the period determined. Insurance premiums may be paid in one payment or as divided according to the insurance contract.
Article 17 (Legal effect of insurance contract)
The legal effect of an insurance contract shall arise when the policyholder pays the insurance premium. After the legal effect of an insurance contract arises, the legal effect of an insurance contract shall be suspended if the policyholder does not pay the insurance premium installments within the designated period. However, in cases where the policyholder has paid the unpaid insurance premiums and relevant arrears charges, the suspended legal effect of the insurance contract shall arise again.
Article 18 (Change in the content of an insurance contract)
A policyholder may change part of the contract content by agreement with the insurer within 1 month of the day the insurance contract was concluded. In these cases, the changed content must be attached to the insurance policy.
Article 19 (Cancellation of insurance contracts)
A policyholder may cancel the whole or a part of an insurance contract by agreement with the insurer at any time before an insurance accident occurs. Things like transportation cargo insurance contracts and ship voyage insurance contracts may not be cancelled after the responsibility of the insurer commences.
Article 20 (Repayment of insurance premiums)
In cases where an insurance contract is cancelled, an insurer must return to the insured person the remainder of the insurance premiums already received after deducting the insurance premiums corresponding to the period between the day the responsibility of the insurer commenced to the day the contract was cancelled.
Article 21 (Transfer of insured subject)
A policyholder may transfer an insured subject to a third party. In cases where the consent of the insurer is obtained in writing and the insurance policy is handed over to the third party together with the insured subject, the given insurance contract shall have legal effect as is.
Article 22 (Duty to notify of insurance accident and mitigate damage)
If an insurance accident occurs during the period of the insurance contract, the policyholder, insured person, and insurance beneficiary must notify the insurer without delay. The policyholder or insured person must actively work to prevent the damage from increasing. Reasonable expenses spent by the policyholder or insured person to prevent the damage from increasing shall be borne by the insurer.
Article 23 (Confirmation of cause and scale of damage of insurance accident)
An insurer may confirm the cause and scale of damage of the insurance accident on location, and may request a damage analysis from the authorities concerned. In cases where the insurer requires it, the policyholder, insured person, and insurance beneficiary must preserve the scene of the accident and must co-operate with the damage analysis.
Article 24 (Submission of claim of insurance compensation document)
When an insurance accident is determined to have occurred, a policyholder must submit a claim of insurance compensation document to the insurer within the period determined. To the claim of insurance compensation document must be attached materials that are able to confirm the cause and scale of damage of the insurance accident.
Article 25 (Payment of insurance money and insurance compensation)
An insurer must review a claim of compensation document and must pay the insurance money or insurance compensation within the period determined.
Article 26 (Cases where insurance money and insurance compensation are not paid)
In cases where a policyholder, insured person, or insurance beneficiary has done the following acts, insurance money or insurance compensation shall not be paid.
1. In cases where an insurance accident has been intentionally caused
2. In cases where the cause of the insurance accident has been fabricated
Article 27 (Insurance contracts that shall not have legal effect)
Insurance contracts that violate the interests of society and groups, and insurance contracts concluded in violation of law, shall not have legal effect. Insurance contracts concluded after the insurance accident arose shall also not have legal effect.
Article 28 (Reinsurance contract)
Reinsurance contracts shall be concluded and fulfilled according to the form and method determined by the central insurance guidance institution. Reinsurance contracts shall not have influence over the original insurance contract.
CHAPTER III. PERSONAL INSURANCE
Article 29 (Subjects of personal insurance)
Personal insurance shall have as its subject the life or body of a person. With the exception of a child, a person who is incompetent to act in civil affairs may not have personal insurance.
Article 30 (Units capable of personal insurance)
Personal insurance may be purchased by an individual or by an institution, enterprise or organization as a unit. In these cases, a policyholder shall have duties and rights in the insurance contract such as the payment of insurance premiums and the right of claim to insurance money.
Article 31 (Consent of parties to an insurance contract)
A policyholder may conclude an insurance contract for a spouse, parent, or minor children without the consent of that person. However, in cases where an insurance contract is concluded for brothers, sisters, or relatives, the consent of that person in writing must be received.
Article 32 (Agreement on insurance amount)
The insurance amount in personal insurance shall be determined by agreement between the insurer and policyholder. In these cases, the sum of money determined by the central insurance guidance institution may not be exceeded.
Article 33 (Selection of insurance beneficiary)
The selection of insurance beneficiary shall be done by the insured person. In cases where the policyholder selects the insurance beneficiary, the consent of the insured person shall be received, and in cases where the insurance beneficiary changes, the insurer must be notified in writing.
Article 34 (Submission of insurance money claim document)
In cases where an insured person has died or has been injured or has acquired a disability because of an insurance accident, a policyholder or insurance beneficiary must submit an insurance money claim document to the insurer. To the insurance money claim document shall be attached the confirmation documents of authorities concerned such as a death confirmation document or a labour capacity loss confirmation document.
Article 35 (Payment of insurance money from personal insurance)
In cases where an insured person has passed away, personal insurance shall pay death benefits. In cases where an insurance accident has arisen because of the negligence of the policyholder or insurance beneficiary, insurance money shall be paid.
Article 36 (Payment of insurance money from accident insurance)
In accident insurance, the given insurance money shall be paid in cases where the insured person has died or been injured or has become disabled as a result.
Article 37 (Cases where death benefits are paid to an heir)
Cases where death benefits of an insured person are paid to an heir are as follows.
1. In cases where an insurance beneficiary has not been determined
2. In cases where the insurance beneficiary has passed away before the insured person but there is no other insurance beneficiary
3. In cases where the insurance beneficiary has lost or abandoned his or her right of claim to insurance money but there is no other insurance beneficiary
Article 38 (Right of claim against a third party)
In life insurance, in cases where the insured person has died due to the error of a third party, an insurer who has paid death benefits to the insurance beneficiary may not have a right of claim against the third party. However, in accident insurance, the insurer has a right of claim against the third party within the scope of the insurance money paid.
CHAPTER IV. PROPERTY INSURANCE
Article 39 (Subject of property insurance)
Property insurance shall take as their subject the property or interests related to property of institutions, enterprises, organizations, and citizens. The subject of property insurance must be a thing able to be calculated as a sum of money.
Article 40 (Insurance price and insurance amount)
An insurance price is the value of an insured subject evaluated in the designated currency and is the highest limit of the insurance amount. The insurance amount may not be decided in excess of the insurance price.
Article 41 (Responsibility for compensation in cases where the insurance amount is less than the insurance price)
In cases where the insurance amount is less than the insurance price, the insurer shall bear responsibility for compensation according to the proportion of the insurance amount and insurance price. In cases where it has been separately agreed in the insurance contract, it shall be followed.
Article 42 (Responsibility for compensation in cases where the insurance amount is greater than the insurance price)
In cases where the insurance amount has become greater than the insurance price due to the error of the parties, the insurer shall only bear the responsibility for compensation corresponding to the insurance price.
Article 43 (Responsibility for compensation for multiple insurance)
In cases where one subject has been signed up for several insurances with the same insurance conditions, the policyholder must inform each insurer of that fact. In cases where the total cost of the insurance amount guaranteed by the insurers exceeds the insurance price, the responsibility for compensation of each insurer shall follow the proportion of the insurance amount that insurer guaranteed and the total cost of the insurance amount.
Article 44 (Management of insured subjects, discovery of safety conditions)
An insurer may investigate the management or safety conditions of an insured subject, and if they discover a defect they must require the policyholder or insured person to repair it. In cases where the policyholder or insured person has not adopted measures to repair the defect, the insurer may raise the insurance premium rate or cancel the insurance contract.
Article 45 (Change in insurance risk)
If a risk changes that is capable of causing influence on the insurance contract within the insurance period, the policyholder or insured person must inform the insurer without delay. In cases where the risk of the insured subject has decreased, the insurer shall return the given insurance premium, and in cases where the risk of the insured subject has increased, it may require a supplementary insurance premium or cancel the insurance contract.
Article 46 (Insurance compensation method)
In cases where an insurance accident has occurred, the insurer must pay insurance compensation according to the insurance contract. Insurance compensation may be done using the methods of repair, substitution, or restoration.
Article 47 (Cases where an insurer takes the rights of the insured person)
In cases where damage has occurred to an insured subject because of an insurance accident and the insurer has paid the whole or a part of the insurance amount to the policyholder or insured person, the relevant rights of the insured person over the insured subject shall transfer to the insurer.
Article 48 (Payment of supplementary insurance premium and insurance compensation)
In cases where a damaged insured subject has been restored through insurance compensation, if a policyholder pays a supplementary insurance premium, they shall have the right to receive insurance compensation according to the relevant insurance amount for insurance accidents that may occur during the remaining insurance period.
Article 49 (Prolongation of insurance period)
If a policyholder does not notify the insurer about his or her desire to nullify the contract within 3 months of the period of the insurance contract ending, the insurance contract shall automatically be prolonged for 1 year. In these cases, the policyholder must pay the given insurance premium and the insurer must re-issue the insurance policy.
Article 50 (Rights to a claim for damage compensation against third parties)
In cases where an insurance accident has arisen due to the error of a third party, an insurer who has paid insurance compensation shall have rights to a claim for damage compensation against third parties within the scope of the insurance compensation. In cases where an insured person has already received damage compensation monies from a third party, the insurer shall pay insurance compensation after deducting that sum of money.
Article 51 (Abandonment of rights to a claim for damage compensation against a third party)
In cases where an insured person has abandoned his or her rights to a claim for damage compensation against a third party before the insurer has paid insurance compensation, the insurer shall not uphold its responsibility for compensation against that insured person. In cases where an insured person who has received insurance compensation has abandoned his or her rights to a claim for damage compensation against a third party without agreement with the insurer, the insurer shall have the right to have its insurance compensation returned. In cases where the insured person has not been able to exercise his or her rights to a claim for damage compensation against a third party due to negligence, the insurer may decrease the insurance compensation.
Article 52 (Payment of damages from legal liability insurance)
In cases where an insurance accident has arisen under legal liability insurance, an insurer shall directly pay damages to the third party. However, in cases where the policyholder has already paid damages to the third party, the damages shall be paid to the policyholder. Under legal liability insurance, the arbitration expenses and litigation costs related to the damage incurred by the third party shall be borne by the insurer.
CHAPTER V. INSURANCE COMPANIES
Article 53 (Establishment approval for insurance companies)
Establishment approval for an insurance company shall be done by the central insurance guidance institution. An insurance company that has not received establishment approval may not do insurance work.
Article 54 (Establishment conditions for insurance company)
In cases where an insurance company is sought to be established, it must have the following conditions.
1. The bylaws and internal rules of the company
2. The types and types of businesses of the insurance
3. Insurance contract standard conditions and insurance premium rates
4. Designated registration funds
5. The place of business and facilities
6. The required business administration managerial personnel
Article 55 (Submission of insurance company establishment application document)
Institutions, enterprises and organizations seeking to establish an insurance company shall submit the materials required by the central insurance guidance institution, and after receiving their agreement, must submit an insurance company establishment application document. The form and content of an insurance company establishment application document shall be determined by the central insurance guidance institution.
Article 56 (Time limit for review of insurance company establishment application document)
The central insurance guidance institution shall review the insurance company establishment application document and must approve or reject the establishment of the company within 60 days.
Article 57 (Issue of operating permits, establishment day of insurance company)
In cases where the establishment application of the insurance company has been approved, the central insurance guidance institution must issue an operating permit for the insurance company. The day the operating permit was issued shall be the establishment day of the insurance company.
Article 58 (Address registration and tax registration of insurance company)
Insurance companies shall do their address registration at the province (or municipality directly under central authority) People’s Committee of the location of the company within 30 days of the day the operating permit was received, and must do their tax registration with the given financial institution within 20 days of the day the address registration was done.
Article 59 (Reasons for cancellation of establishment approval)
In cases where an insurance company does not do the designated registrations within 3 months of the day the operating permit was received, the central insurance guidance institution may cancel the establishment approval of the insurance company.
Article 60 (Establishment of branch office, mission, agency)
An insurance company may establish a branch office, mission, or agency within the territory of our country with the approval of the central insurance guidance institution. Branch offices, missions, and agencies must do their address registration with the city (or district), or county People’s Committee in the location of the day the establishment approval was received. Civil liability in relation to the activities of branch offices, missions and agencies shall be borne by the given insurance company.
Article 61 (Establishment of overseas insurance missions and insurance companies)
In cases where an insurance company seeks to establish an insurance mission or insurance company outside of the territory of our country, it must receive the approval of the central insurance guidance institution.
Article 62 (Scope of work of insurance company)
Insurance companies and their branch offices, missions, and agencies must do their work activities within the scope of what the central insurance guidance institution has approved. In cases where things such as name, bylaws, type of business, registration funds, or place of business are to be changed, the approval of the central insurance guidance institution must be received.
Article 63 (Accumulation of insurance collateral)
Insurance companies must possess the designated minimum ability to pay compensation and must accumulate insurance collateral. The scale and method of accumulation of insurance collateral shall be determined by the central insurance guidance institution.
Article 64 (Management of registration funds)
An insurance company must deposit registration funds into a bank determined by the central insurance guidance institution. Registration funds may not be used without the approval of the central insurance guidance institution.
Article 65 (Submission of financial review meeting documents)
Insurance companies must correctly draft documents such as business reports, position statements, and statements of profit and loss within 3 months of the day the business year ends and submit them to the central insurance guidance institution and given financial institution. The annual financial settlement document shall be submitted with the inspection of the accounting inspection institution.
Article 66 (Insurance representative)
An insurance company may conclude an insurance contract through an insurance representative. In these cases, they shall hold a representative roll and must register an insurance representative. Insurance representatives shall do representative work within the scope of their authority authorized by the insurance company, and must accurately record that status in a document. Responsibility for insurance representative acts shall be borne by the given insurance company.
Article 67 (Insurance brokers)
Insurance brokerage for policyholders shall receive the approval of the central insurance guidance institution and shall be done by insurance brokers. Insurers shall take responsibility for damage caused to policyholders due to negligence and shall have the right to receive a brokerage fee.
Article 68 (Division, combination, dissolution of insurance company)
An insurance company seeking to be divided, combined, or dissolved must receive the approval of the central insurance guidance institution. An insurance company doing life insurance work may not be dissolved and may only be divided or combined.
CHAPTER VI. GUIDANCE AND CONTROL AND DISPUTE RESOLUTION OVER INSURANCE WORK
Article 69 (Guidance and control institution for insurance work)
Guidance and control for insurance work shall be done by the central insurance guidance institution. The central insurance guidance institution shall improve guidance methods for insurance work in conformity with the requirements of insurance work development, and must correctly guide and control the business operations of the insurance company.
Article 70 (Business content of central insurance guidance institution)
The central insurance guidance institution shall do the following work.
1. It shall draft the regulations and manuals to implement the insurance policy and insurance regulations of the State.
2. It shall investigate and analyse the global insurance market and modern trends in insurance and notify the insurance company.
3. It shall approve the bylaws, insurance contract standard conditions, insurance premium rate, and type of insurance business of insurance companies.
4. It shall determine the scale and accumulation method of the registration funds and insurance collateral of insurance companies.
5. It shall supervise the work activities of insurance companies, insurance branch offices, insurance representatives, and insurance brokers.
6. It shall approve the establishment, division, combination, and dissolution of insurance companies and their branch offices, missions, and agencies.
7. It shall approve the form and content of documents related to insurance, such as insurance contract application documents and insurance policies, drafted by insurance companies.
8. It shall approve, restrict, or prohibit reinsurance trading.
9. It shall do other work authorized by the State.
Article 71 (Evaluation and analysis for insured subjects and insurance accidents)
The central insurance guidance institution must correctly conduct evaluation and analysis for insured subjects and insurance accidents. Evaluation and analysis for insured subjects and insurance accidents may only be done by the specialist analysis institution and by workers that have State qualifications or professional knowledge in the given field.
Article 72 (Fixed date for storage of documents related to insurance)
Institutions, enterprises, organizations, and insurance companies must store documents and materials related to insurance work until the end of the period determined by the central insurance guidance institution or given institution.
Article 73 (Levy of a penalty or suspension of operations for insurance companies)
Cases where a penalty shall be imposed on an insurance company or its operations shall be suspended are as follows.
1. In cases where an insurance company has been established without approval, or insurance work has been done without doing the designated registration
2. In cases where insurance contract standard conditions or insurance premium rates have been applied, or the type of insurance business has been changed, without approval
3. In cases where the documents related to financial accounting have not been truthfully drafted
4. In cases where insurance compensation was not provided or less was provided, without a lawful reason
5. In cases where the name, bylaws, registration funds, or place of operation of the company was changed without approval
6. In cases where insurance collateral has not been accumulated or registration funds have been put to a different use without approval
7. In cases where an insurance company has been divided, combined, or dissolved without approval
8. In cases where personal insurance has been organized using a person who is incompetent to act as a subject, excluding children
Article 74 (Levy of a penalty against policyholders or insurance beneficiaries)
Cases where a penalty shall be imposed on a policyholder or insurance beneficiary are as follows.
1. In cases where they have intentionally caused an insurance accident and received insurance money or insurance compensation
2. In cases where they have made a false notification related to an insurance accident and have made made a document according to that notification and received insurance money or insurance compensation
3. In cases where they have counterfeited a document and received more insurance money or insurance compensation
4. In cases where they have not purchased compulsory insurance or have purchased compulsory insurance but have not paid insurance premiums in time
Article 75 (Levy of a penalty against individual workers)
Cases where a penalty shall be imposed on an individual worker in an insurance company are as follows.
1. In cases where he or she has abused his or her authority to cause a claim of insurance compensation procedure without an insurable interest or proper basis and paid out insurance compensation
2. In cases where a policyholder or insurance beneficiary has been deceived
3. In cases where he or she has encouraged the unlawful act of a policyholder or insurance beneficiary or has colluded with him or her
Article 76 (Criminal liability)
In cases where grave consequences have been caused by violating this law, the person responsible shall have criminal liability imposed depending on the gravity.
Article 77 (Dispute resolution)
Disputes related to insurance work shall be resolved by method of consultation. In cases where they cannot be resolved by method of agreement, they shall be raised and resolved in court proceedings or an arbitral organ of our country. They may also be raised and resolved in arbitral organs of other countries by agreement of the parties.
Last updated 15 February 2021