INSURANCE BUSINESS ACT
Wholly Amended by Act No. 6891, May 29, 2003 Amended by Act No. 7379, Jan. 27, 2005 Act No. 7428, Mar. 31, 2005 Act No. 7971, Aug. 29, 2006 Act No. 8386, Apr. 27, 2007 Act No. 8520, Jul. 19, 2007 Act No. 8572, Aug. 3, 2007 Act No. 8852, Feb. 29, 2008 Act No. 8863, Feb. 29, 2008 Act No. 8902, Mar. 14, 2008
CHAPTER Ⅰ GENERAL PROVISIONS
Article 1 (Purpose)
The purpose of this Act is to contribute to the sound development of insurance business and the balanced development of the national economy through the solid operations of insurers and the protection of rights and interests of policy holders, the insured and interested persons.
Article 2 (Definitions)
The definitions of terms used in this Act are as follows: <Amended by Act No. 8520, Jul. 19, 2007; Act No. 8863, Feb. 29, 2008>
1. The term “insurance business” means the business of receiving money from the insured in return for promising the payment of agreed benefits to the insured for their life or death and for indemnifying damage resulting from any accident, etc. for the insured, and such insurance business is categorized into life insurance business, the business of insurance against loss and the third insurance business;
2. The term “life insurance business” means the business of receiving money from the insured in return for promising the payment of agreed benefits to the insured for their life or death;
in return for promising them to indemnify damage suffered by any creditor and any claimant to be liable for the fulfillment of liabilities incurred by any trade, any employment, any contract or the fulfillment of obligations in accordance with Acts and subordinate statutes);
4. The term “third insurance business” means the business of receiving money from the insured in return for promising the payment of agreed benefits to the insured for any disease, any injury and any nursing thereof or for indemnifying damage caused by such disease, such injury and such nursing for the insured;
5. The term “insurance company” means any person who runs the in- surance business after obtaining a license provided for in the pro- visons of Article 4;
6. The term “mutual company” means a company incorporated pursu- ant to this Act for the purpose of running the insurance business with its policy holders being its members;
7. The term “foreign insurance company” means any insurance company incorporated by any person for the purpose of running the insurance business in a country other than the Republic of Korea in accordance with Acts and subordinate statutes of such country;
8. The term “insurance solicitor” means any person who is engaged in the business of brokering the conclusion of insurance contracts for his insurance company (including any incorporate body and any foun-dation, either of which is not a corporation) after having him reg- istered in accordance with the provisions of Article 84;
9. The term “insurance agency” means any person who is engaged in the business of concluding insurance contracts on behalf of his insur- ance company (including any incorporate body and any foundation, either of which is not a corporation) after having him registered in accordance with the provisions of Article 87;
10. The term “certified insurance broker” means any person who is in-dependently engaged in the business of brokering the conclusion of insurance contracts (including any incorporate body and any foun- dation, either of which is not a corporation) after having him regis- tered in accordance with Article 89;
12. The term “credit extension” means loaning or the purchase of secu- rities (limited to the purchase of securities in the nature of financial support) and direct and indirect financial transactions involving credit risk of insurance companies, which are all prescribed by the Financial Services Commission under the conditions as prescribed by Presidential Decree and insurance companies;
13. The term “total assets” means the assets obtained by excluding the assets, including undepreciated new contract expenses and business right, etc., prescribed by the Presidential Decree, from the assets in- dicated on the balance sheet;
14. The terms “equity capital” means paid-in capital, capital surplus, earned surplus and others equivalent thereto (excluding any recap- italization) that are obtained by subtracting the aggregate amount of items, including business rights, and others equivalent thereto prescribed by Presidential Decree from the aggregate amount of items prescribed by Presidential Decree;
15. The term “same borrower” means the same individual or the same corporation and any person who shares credit risk with the former, who are each prescribed by Presidential Decree;
16. The term “large shareholder” means a shareholder falling under any of the following items:
(a) Majority shareholder: a person himself, where he and a person specially related to him (hereinafter referred to as a“specially related person”) as prescribed by Presidential Decree, hold the greatest number of voting shares of an insurance company, after summing up the total number of stocks they own, no matter whose name the accounts stand in; or
(b) Principal shareholder: a person who holds 10/100 or more of the total number of voting shares of an insurance company on his own no matter whose name the accounts stand in, or a person prescribed by Presidential Decree among shareholders who exercise de facto influence on the main matters of management, such as appointment or dismissal of officers, etc. of the insurance company; and
Article 3 (Conclusion of Insurance Contracts)
No one shall conclude any insurance contract with any person who is not an insurance company, broker the conclusion of any insurance contract or act on behalf of any insurance company: Provided, That the same shall not apply to the case where Presidential Decree prescribes.
CHAPTER Ⅱ LICENSE OF INSURANCE
BUSINESS, ETC.
Article 4 (License for Insurance Business)
(1) Any person who intends to run the insurance business shall obtain a license from the Financial Services Commission according to the types of insurance business, which are each prescribed in the following subparagraphs: <Amended by Act No. 8863, Feb. 29, 2008>
1. The types of the life insurance business: (a) Life insurance;
(b) Pension insurance (including retirement insurance); and
(c) Other types of insurance business, which are prescribed by Presidential Decree;
2. The types of the business of insurance against loss: (a) Fire insurance;
(b) Maritime insurance (including air transportation insurance); (c) Automobile insurance;
(d) Guaranty insurance; (e) Reinsurance; and
(f) Other types of insurance business, which are prescribed by Presidential Decree; and
3. The types of the third insurance business: (a) Injury insurance;
(b) Disease insurance; (c) Nursing insurance; and
(d) Other types of insurance business, which are prescribed by Presidential Decree.
(3) Any person who is entitled to obtain a license for the insurance busi- ness shall be limited to any stock company, any mutual company and any foreign insurer, and the branch office in the Republic of Korea of any foreign insurer, which obtains a license for the insurance business under paragraph (1), (hereinafter referred to as the “local branch office of foreign insurer”) shall be deemed an insurance company incorporated pursuant to this Act.
(4) The Financial Services Commission may lay down terms to the license referred to in paragraph (1). <Amended by Act No. 8863, Feb. 29, 2008>
Article 5 (Filing of Application for License, etc.)
Any person who intends to obtain a license in accordance with the pro- visions of Article 4 (1) shall file an application, accompanied by documents falling under each of the following subparagraphs, with the Financial Services Commission: Provided, That in the case that it is intended to add any new insurance type to the types of the insurance business, which are presently run by any insurance company, the document referred to in subparagraph 1 may not be submitted: <Amended by Act No. 8863, Feb. 29, 2008>
1. The articles of incorporation;
2. The business plan for three years after the commencement of the insurance business (including the estimated financial statement);
3. The business operating manual by the type of insurance business intended to run, insurance clauses and methods of calculating insur- ance premiums and the liability reserve (hereinafter referred to as the “basic document”); and
4. Documents prescribed by Presidential Decree other than the documents referred to in subparagraphs 1 through 3.
Article 6 (Requirements for License, etc.)
(1) Any person who intends to obtain a license for his insurance business (excluding any foreign insurer) shall meet the requirements falling under each of the following subparagraphs: <Amended by Act No. 8520, Jul. 19, 2007>
1. He is required to hold the capital or the fund provided for in the pro- visions of Article 9 (1) and (2);
2. He is required to be able to protect policy holders and have physical facilities, including data-processing facilities and professional man- power, which are adequate to run his insurance business;
3. His business plan is required to be appropriate and sound; and
person to the majority shareholder; hereafter the same shall apply in this Article) prescribed by Presidential Decree are required not to fall under any of the subparagraphs of Article 13 (1) and to have full equity-investment abilities and sound financial standings with no history of disrupting the sound economic order.
(2) Any foreign insurer that intends to obtain a license for the insur- ance business shall meet requirements falling under each of the following subparagraphs:
1. It is required to hold the business fund provided for in the provisions of Article 9 (3);
2. It is required to run the insurance business abroad in accordance with foreign Acts and subordinate statutes, which is the same as the in- surance business it intends to run in the Republic of Korea;
3. It is required to hold assets and have the sound financial standing as well as the business soundness, which are internationally recog- nized as adequate for it to run the insurance business in the Republic of Korea; and
4. It is required to meet the requirements referred to in paragraph (1) 2 and 3.
(3) Every insurance company shall keep the requirement referred to in paragraph (1) 2 fulfilled under the conditions as prescribed by Presidential Decree even after it obtains a license for the insurance business: Provided, That the same shall not apply to the case where any insurance company fails to keep such requirements fulfilled for the purpose of ensuring the soundness of its management and protecting the interests of policy holders, etc. after obtaining approval from the Financial Services Commission under the conditions as prescribed by Presidential Decree. <Amended by Act No. 8863, Feb. 29, 2008>
(4) Any person who intends to be a large shareholder (excluding a per- son prescribed by Presidential Decree) after acquiring stocks of any in- surance company shall meet from among the requirements prescribed by Presidential Decree for sound management from among, and shall obtain prior approval from the Financial Services Commission. <Amended by Act No. 8520, Jul. 19, 2007; Act No. 8863, Feb. 29, 2008>
(6) Any person who has acquired any share without obtaining approval in accordance with paragraph (4) shall be prohibited from exercising his voting right on such share.
(7) Necessary matters concerning detailed requirements for license, approval and order referred to in paragraphs (1) through (5) shall be prescribed by Presidential Decree.
Article 7 (Preliminary License)
(1) Any person who intends to apply for a license (hereafter in this Ar- ticle referred to as “principal license”) in accordance with the provisions of Article 4 may apply to the Financial Services Commission for a preliminary license in advance. <Amended by Act No. 8863, Feb. 29, 2008>
(2) The Financial Services Commission shall, upon receiving any application filed in accordance with paragraph (1), examine the application and notify the applicant of whether a preliminary license shall be granted or not within the term of three months from the date on which it receives the application: Provided, That the term of three months may be extended under the conditions as prescribed by Ordinance of the Prime Minister.
<Amended by Act No. 8863, Feb. 29, 2008>
(3) The Financial Services Commission may lay down terms to any preliminary license referred to in paragraph (2). <Amended by act No. 8863, Feb. 29, 2008>
(4) When any person who has been granted a preliminary license files an application for a principal license after fulfilling the terms laid down to the preliminary license, the Financial Services Commission shall grant him such principal license. <Amended by Act No. 8863, Feb. 29, 2008>
(5) Standards for the preliminary license and necessary matters concerning the preliminary license shall be prescribed by Ordinance of the Prime Minister. <Amended by Act No. 8863, Feb. 29, 2008>
Article 8 (Company Name or Title)
(1) Every insurance company shall indicate principal types of the insur- ance business that it runs in its company name or title.
(2) Any person who is not an insurance company shall be prohibited from using any letter indicating insurance company in his company name or title.
Article 9 (Capital or Fund)
fund: Provided, That in the case that any insurance company intends to run part of the types of the insurance business provided for in the pro- visions of Article 4 (1), the amount of the capital or the fund may be otherwise prescribed by Presidential Decree within the amount of not less than 5 billion won.
(2) Notwithstanding the provisions of paragraph (1), any insurance company that solicits people to enter into insurance contracts using communications means such as telephone, mail and computer commu-nications under the conditions as prescribed by Presidential Decree may commence its insurance business after it pays an amount equivalent to not less than two thirds of the capital or the fund required under para- graph (1).
(3) In the case that any foreign insurer intends to run the insurance business in the Republic of Korea, its business fund prescribed by the Presidential Decree shall be deemed the capital or the fund required under paragraph (1) or (2).
Article 10 (Prohibition on Concurrent Operation of Insurance Business)
Every insurance company shall be prohibited from concurrently running the life insurance business and the business of insurance against loss:
Provided, That the same shall not apply to the types of the insurance
business, which fall under any of the following subparagraphs:
1. The reinsurance of the life insurance business and the reinsurance of the third insurance business;
2. The types of the insurance business, which are prescribed by Presidential Decree and allowed to be concurrently run in accordance with other Acts and subordinate statutes; and
3. Any insurance that is added to the types of the third insurance in accordance with the standards set by Presidential Decree.
Article 11 (Prohibition on Concurrent Operation of Other Business)
(1) Every insurance company shall be prohibited from running any business other than the insurance business with the exception of the business falling under each of the following subparagraphs: <Amended by Act No. 8863, Feb. 29, 2008>
1. The financial business that is prescribed by Presidential Decree and is allowed to be run by every insurance company in accordance with relevant Acts and subordinate statutes;
authorized by the Financial Services Commission as possible for every insurance company to run it concurrently;
3. The business that falls under each of the following subparagraphs and is prescribed by Presidential Decree as incidental business:
(a) The business related to the insurance business (including the business of brokering or vicariously brokering transactions be- longing to the insurance business for other insurance company); (b) The business of exploiting manpower, assets or facilities and
equipment in possession of any insurance company; and
(c) The business, for which it is not required to obtain any license, authorization, approval or registration, etc. under other Acts and subordinate statutes.
(2) Any insurance company shall, if it intends to run any business other than the insurance business in accordance with paragraph (1), perform the accounting of such other business separately from the insurance business under the conditions as prescribed by Presidential Decree.
Article 12 (Opening of Local Offices, in Republic of Korea by Foreign Insurers, etc.)
(1) Any foreign insurer or any person who is running the business of in- surance subrogation, insurance brokerage and other insurance-related business abroad (hereinafter referred to as “foreign insurer, etc.”) may open its or his office in the Republic of Korea (hereinafter referred to as “local office”) for the purpose of surveying the insurance market, gath- ering information and performing other work similar thereto.
(2) Every local office shall be prohibited from performing the act falling under each of the following subparagraphs:
1. The act of running the insurance business;
2. The act of brokering or vicariously brokering the conclusion of insur- ance contracts; and
3. The act that is prescribed by Presidential Decree as being in con- travention of the purpose of opening the local office.
(3) Every local office shall use the letter office in its name.
CHAPTER Ⅲ INSURANCE COMPANY
SECTION 1 Officers and Employees
Article 13 (Qualifications for Officers)
(1) Any person falling under any of the following subparagraphs shall be disqualified as an officer of any insurance company (referring to any director, any auditor or any person who is prescribed by Presidential Decree as being equal to such officer; hereafter in this Chapter, Article 76 (3) and subparagraph 2 of Article 130 the same shall apply): <Amended by Act No. 7428, Mar. 31, 2005; Act No. 8520, Jul. 19, 2007; Act No. 8863, Feb. 29, 2008>
1. A minor, an incompetent or quasi-incompetent person;
2. A person who was declared bankrupt and who has yet to be reinstated; 3. A person who has been sentenced to imprisonment without prison
labor or to a heavier punishment, and five years have yet passed since the expiration of the term of sentence, or since the decision to exempt such sentence has been made (including a case that the execution of such sentence is deemed terminated);
4. A person who has been sentenced to a fine or a heavier punishment under this Act, foreign Acts and subordinate statutes equivalent thereto and finance-related Acts prescribed by Presidential Decree and for whom five years have yet to expire from the date on which the execution of such sentence was terminated or exempted (including the case that the execution of such sentence is deemed terminated);
5. A person who is in a stay period after having been sentenced to a stay of the execution of the imprisonment without prison labor or a heavier punishment;
6. A person who has worked as an officer or an employee for a company or a corporation, whose business authorization and license, etc. have been revoked in accordance with this Act or finance-related Acts prescribed by Presidential Decree, and for whom five years have yet to expire from the date on which such business authorization and license, etc. were revoked (limited to any person who is prescribed by Presidential Decree as directly responsible for incurring the grounds of revoking such authorization and license, etc.);
corrective measures taken by the Financial Services Commission in accordance with the provisions of Article 10 (1) of the same Act or an administrative disposition, including a decision, which is taken and made by the Financial Services Commission, to transfer insurance contracts in accordance with the provisions of Article 14 (2) of the same Act (hereinafter referred to as “timely corrective measures, etc.”), and two years have yet passed since the date on which such financial institution was subjected to the timely corrective measures, etc. (limited to any person who is prescribed by Presidential Decree as directly responsible for incurring the grounds of ordering such timely corrective measures, etc.);
8. A person who has been dismissed or dismissed after facing a disci- plinary action in accordance with this Act, foreign Acts and subor- dinate statues corresponding this Act and finance-related Acts pre- scribed by Presidential Decree and for whom five years have yet to expire from the date on which he was dismissed or dismissed after facing such disciplinary action; and
9. A retired officer or a resigned employee, who has been served a notice that if the retired officer or the resigned employee still works on as an officer or an employee, he would have been dismissed or dismissed after facing a disciplinary action in accordance with Article 135 or finance-related Acts prescribed by Presidential Decree and for whom five years have yet to expire from the date on which he was served such notice (in the case that five years from the date on which he was served the notice exceed seven years from the date on which he retired or resigned, the number of years shall be made seven years from the date on which he retired or resigned).
(2) Officer of every insurance company shall be persons who are not feared to undermine the public interests and the sound management of the insurance business and disrupt the order of transactions.
(3) Specific matters concerning qualification requirements for officers referred to in paragraph (2) may be prescribed by Presidential Decree.
(4) In the case that any person who is selected and appointed as an officer of any insurance company falls under each subparagraph of paragraph (1) or is found to fall under each subparagraph of paragraph (1) at the time of his selection and appointment, he shall be rightly dismissed.
Article 14 (Prohibition on Officers Holding Concurrent Offices)
Every standing officer of insurance companies shall be prohibited from concurrently working as a managing director for other profit-making corporation: Provided, That the same shall not apply to the case falling under each of the following subparagraphs: <Amended by Act No. 7428, Mar. 31, 2005; Act No. 8520, Jul. 19, 2007>
1. Where he becomes an officer or an employer of a financial holding company incorporated pursuant to the Financial Holding Companies Act, which runs an insurance company as a subsidiary;
2. Where he is selected and appointed as a receiver under the Debtor Rehabilitation and Bankruptcy Act;
3. Where he becomes an officer or an employer of any subsidiary (ex- cluding the case prescribed by Presidential Decree); and
4. Where he is prescribed by Presidential Decree as not being feared to be in conflict of interest with policy holders.
Article 15 (Selection and Appointment, etc. of Outside Directors)
(1) Every insurance company (limited to insurance companies prescribed by Presidential Decree in light of their assets, etc.; hereafter in this Ar- ticle the same shall apply) shall have not less than three directors (herein- after referred to as “outside directors”) who are not engaged in the reg- ular duties at the board of directors and do not fall under any of the subparagraphs of paragraph (4), and the number of outside directors shall exceed a half of the total number of directors. <Amended by Act No. 8520, Jul. 19, 2007>
(2) Every insurance company shall set up a committee with the mandate to recommend candidates for outside directors in accordance with the provisions of Article 393-2 of the Commercial Act (hereinafter referred to as the “outside director candidate recommendation committee”). In this case, the number of outside directors shall make up not less than half of the number of the total members of the outside director candi- date recommendation committee. <Amended by Act No. 8520, Jul. 19, 2007>
(3) Outside directors shall be selected and appointed at the general meeting of shareholders or the general meeting of members (hereinafter referred to as the “general meeting of shareholders, etc.”) from among persons recommended by the outside director candidate recommendation committee.
di-rector shall lose his position when he comes to fall thereunder: <Amended by Act No. 8520, Jul. 19, 2007>
1. A minor, incompetent or quasi-incompetent;
2. A person who was sentenced bankrupt and has not been reinstated;
3. A person who was sentenced imprisonment without labor or heavier punishment and for whom 2 years have not passed since the execu- tion of such sentence was completed or the exemption of the execu- tion of such sentence was made definite;
4. A person for whom 2 years have not passed after he was dismissed or removed from the office pursuant to this Act;
5. Large shareholders of the insurance company;
6. A person who is or has been a full-time officer or an employee of the insurance company or an affiliated company thereof (referring to an affiliated company pursuant to the Monopoly Regulation and Fair Trade Act; the same shall apply hereinafter) for last 2 years;
7. Spouse, a lineal ascendant or descendant of a full-time officer of the insurance company;
8. A person who is or has been a full-time officer or an employee of a corporation, for last 2 years, which has important business relation- ship prescribed by Presidential Decree with the insurance company, or which is a competitor or collaborator of the insurance company;
9. A full-time officer or an employee of a company for which a full-time officer or an employee of the insurance company is working part- time; or
10. A person who has difficulty in faithfully performing the duties as an outside director, or who may exercise influence over the insurance company as prescribed by Presidential Decree.
(5) In the case that the composition of the board of directors is not in conformity with the requirement referred to in paragraph (1) on the grounds of resignation or death of any outside director, etc., the com- position of the board of directors shall be brought into conformity with the requirement referred to in paragraph (1) at the regular general meeting of shareholders that is held for the first time since the date on which such grounds accrue.
Article 16 (Audit Committee)
in the provisions of Article 415-2 (1) of the Commercial Act; hereafter the same shall apply). <Amended by Act No. 8520, Jul. 19, 2007>
(2) The audit committee shall meet all the requirements in the follow- ing subparagraphs: <Amended by Act No. 8520, Jul. 19, 2007>
1. 2/3 or more of all the members shall be outside directors; and
2. One or more of the members shall be specialists in accounting or fi- nancial affairs as prescribed by Presidential Decree.
(3) A person who falls under any of the following subparagraphs shall not be a member of the audit committee other than an outside director, and such member shall lose his position when he comes to fall thereun- der: Provided, That any person who is currently serving as a standing auditor or as a non-outside-director member of the audit committee may become a non-outside-director member of the audit committee even though he falls under subparagraph 2: <Amended by Act No. 8520, Jul. 19, 2007>
1. A person who fall under Article 15 (4) 1 through 5;
2. A person who is or has been a full-time officer or an employee of the insurance company for last 2 years; or
3. A person who may have influence over the management of the in- surance company, as prescribed by Presidential Decree.
(4) In the case that the composition of the audit committee is not in conformity with the requirement referred to in paragraph (2) on the grounds of the resignation or death etc. of any member of the audit com- mittee, the relevant insurance company shall bring the composition of the audit committee into conformity with the requirement referred to in paragraph (2) at the regular general meeting of shareholders that is held for the first time since the date on which such grounds accrue.
(5) The provisions of the proviso of Article 415-2 (2) of the Commercial Act shall not apply to the composition of the audit committee referred to in paragraph (1). <Amended by Act No. 8520, Jul. 19, 2007>
Article 17 (Standards, etc. for Internal Control)
(1) Every insurance company shall set fundamental procedures and stan- dards (hereinafter referred to as the “internal-control standards”) by which its officers and employees perform their respective duties in order to abide by Acts and subordinate statutes, to operate its assets in a sound manner and to protect its policy holders.
standards, investigating any violation of the internal-control standards and reporting the findings of such investigation to the auditor or the audit committee (hereinafter referred to as the “law-abiding overseers”).
(3) Every insurance company shall, when it intends to appoint law-abiding overseers, go through a resolution of the board of directors: Provided, That the same shall not apply to the local branch office of any foreign insurer.
(4) Every law-abiding overseer shall meet requirements falling under each of the following subparagraphs: <Amended by Act No. 8520, Jul. 19, 2007; Act Nos. 8852 & 8863, Feb. 29, 2008>
1. He is required to have the background falling under each of the fol- lowing items:
(a) Person who has worked not less than ten years for the Bank of Korea and any institution subject to the audit conducted in ac-cordance with the provisions of Article 38 of the Act on the Establishment, etc. of Financial Services Commission (including any foreign financial institution equivalent thereto);
(b) Person who has worked at least five years as a researcher at any research institute or as a full-time lecturer or higher at any college after earning the master’s degree or higher in finance-related fields; (c) Person who has worked at least five years as an attorney-at-law,
a certified public accountant or a certified insurance accountant in professions related to his qualifications; and
(d) Person who has worked at least five years for the Ministry of Strat- egy and Finance, the Financial Services Commission, the Financial Supervisory Service established pursuant to the Act on the Estab- lishment, etc. of Financial Services Commission (hereinafter re- ferred to as the “Financial Services Commission”) or for the Secu- rities and Futures Commission, and five years have elapsed yet since his resignation or retirement;
2. He is required not to fall under each subparagraph of Article 13 (1); and
(5) Law-abiding overseers shall perform their duties with the care of good managers, but they shall not take charge of the duty of performing the business falling under each of the following subparagraphs:
1. The business of operating assets;
2. The business and incidental business that are prescribed by Pres-idential Decree as being concerned with the insurance business ran by the relevant insurance company; and
3. The financial business that is concurrently run by the relevant in- surance company other than the business of subparagraph 2.
(6) Every insurance company shall, if law-abiding overseers ask its offi- cers and employees to furnish material and information needed to per- form their duties, get such officers and employees to comply sincerely with the request.
(7) Every insurance company shall not unfairly disadvantage any former law-abiding overseer in the personnel administration on the grounds of duties he performed as a law-abiding overseer.
(8) With regard to any insurance company that is recognized to have set effective internal-control standards and rigorously adhered to them, the Financial Services Commission may omit the inspection provided for in the provisions of Article 133, shorten the inspection period, or reduce or exempt the sanctions provided for in the provisions of Article 134 for such insurance company. <Amended by Act No. 8863, Feb. 29, 2008>
(9) Matters to be included in the internal-control standards, matters law-abiding overseers have to observe and other necessary matters shall be prescribed by Presidential Decree.
SECTION 2 Stock Company
Article 18 (Reduction of Capital)
(1) When any stock company that is an insurance company (hereinafter referred to as “stock company”) resolves to reduce its capital, such stock company shall publish a summary of the resolution and its balance sheet within 2 weeks from the date on which it resolves to that effect.
(2) The provisions of Articles 139, 141 (2) and (3), 149 and 151 (3) shall apply mutatis mutandis to the case of capital reduction.
Article 19 (Exercise of Rights by Minority Shareholders of Stock Com- pany)
companies prescribed by Presidential Decree in light of their assets, etc.; hereafter the same in this Article shall apply) for at least six months under the conditions as prescribed by Presidential Decree may exercise his right as a shareholder, which is provided for in the provisions of Article 403 of the Commercial Act (including the case where the provisions are applied mutatis mutandis under Articles 324, 415, 424-2, 467-2 and 542 of the Commercial Act). <Amended by Act No. 8520, Jul. 19, 2007>
(2) Any person who has continued to hold not less than 250/100,000 (not less than 125/100,000 in cases of any stock company prescribed by Presidential Decree) of the total number of shares issued by any stock company for at least six months under the conditions as prescribed by the Presidential Decree may exercise his right as a shareholder, which is provided for in the provisions of Articles 385 (including the case where the provisions are applied mutatis mutandis under Article 415 of the Commercial Act), 402 and 539 of the Commercial Act. <Amended by Act No. 8520, Jul. 19, 2007>
(3) Any person who has continued to hold not less than 50/10,000 (not less than 25/10,000 in the case of any stock company prescribed by the Presidential Decree) of the total number of shares issued by any stock company for not less than six months under the conditions as prescribed by the Presidential Decree may exercise his right as a shareholder, which is provided for in the provisions of Articles 363-2 and 466 of the Com- mercial Act. In this case, if the right of a shareholder provided for in the provisions of Article 363-2 of the Commercial Act is exercised, the exercise of such right shall be based on the voting share. <Amended by Act No. 8520, Jul. 19, 2007>
(4) Any person who has continued to hold not less than 150/10,000 (not less than 75/10,000 in the case of any stock company prescribed by Presidential Decree) of the total number of shares issued by any stock company for not less than six months under the conditions as prescribed by Presidential Decree may exercise his right as a shareholder, which is provided for in Articles 366 and 467 of the Commercial Act. In this case, if the right of a shareholder provided for in the provisions of Article 366 of the Commercial Act is exercised, the exercise of such right shall be based on the voting share. <Amended by Act No. 8520, Jul. 19, 2007>
applied mutatis mutandis under Articles 324, 415, 424-2, 467-2 and 542 of the Commercial Act), the shareholder may immediately bring a claim against the relevant stock company for the payment of all expenses incurred by the lawsuit. <Amended by Act No. 8520, Jul. 19, 2007>
Article 20 (Change in Organization)
(1) Every stock company may change its organization into a mutual com- pany.
(2) Notwithstanding the provisions of Article 9, the mutual company re- ferred to in paragraph (1) may set the total amount of its fund at not more than 30 billion won or may not set the total amount of its fund.
(3) In the case of paragraph (1), the mutual company shall accumulate an amount, which is deemed necessary by the Financial Services Commission as a reserve to be appropriated for making up for losses. <Amended by Act No. 8863, Feb. 29, 2008>
Article 21 (Resolution on Change in Organization)
(1) Any change in the organization of every stock company shall go through a resolution of the general meeting of shareholders.
(2) The resolution referred to in paragraph (1) shall be governed by the provisions of Article 434 of the Commercial Act. <Amended by Act No. 8520, Jul. 19, 2007>
Article 22 (Publication and Notice of Resolution on Change in Organi-zation)
(1) Any stock company shall, if it resolves to change its organization, publish a summary of the resolution and its balance sheet, and notify each of pledgees listed on the roll of shareholders of such resolution within 2 weeks from the date of resolution.
(2) The provisions of Article 141 (2) and (3) and Article 232 of the Com- mercial Act shall apply mutatis mutandis to the case of paragraph (1).
<Amended by Act No. 8520, Jul. 19, 2007>
Article 23 (Insurance Contracts after Publication of Resolution on Change in Organization)
(1) Any stock company shall, if it intends to conclude any insurance con- tract after the date on which the publication provided for in the provi- sions of Article 22 (1) is made, put any person to become a policy holder on notice that procedures for a change in its organization are in prog- ress and then obtain his approval therefore.
Article 24 (Call of General Meeting of Policy Holders)
(1) In the case that the number of policy holders who raise an objections to the publication of Article 22 (1) within the period provided for in Ar- ticle 141 (2) and their insurance money do not exceed the ratio provided for Article 141 (3), directors shall promptly call a general meeting of policy holders after the completion of the procedures provided for in Ar- ticle 232 of the Commercial Act. <Amended by Act No. 8520, Jul. 19, 2007>
(2) In the case of paragraph (1), the provisions of Article 353 of the Commercial Act shall apply mutatis mutandis to the notice to policy holders. <Amended by Act No. 8520, Jul. 19, 2007>
Article 25 (Agency of General Meeting of Policy Holders)
(1) Every stock company may prescribe matters concerning an agency acting on behalf of the general meeting of policy holders with respect to a resolution endorsing a change in its organization.
(2) The regulations governing the general meeting of policy holders shall apply mutatis mutandis to the agency referred to in paragraph (1).
(3) In the case that matters concerning the agency referred to in para- graph (1) are prescribed, ways to make up the agency shall be entered in the publication provided for in Article 22 (1).
Article 26 (Resolution of General Meeting of Policy Holders)
(1) The general meeting of policy holders shall resolve with the atten- dance of a majority of policy holders and the concurrent of not less than three quarters of the voting right.
(2) The provisons of Article 55, Articles 363 (1) and (2), 364, 367, 368 (3) and (4), 371 (2), 372, 373 and 376 through 381 of the Commer- cial Act shall apply mutatis mutandis to the general meeting of policy holders. <Amended by Act No. 8520, Jul. 19, 2007>
Article 27 (Report at General Meeting of Policy Holders)
Directors of the relevant stock company shall report matters concerning a change in the organization to the general meeting of policy holders.
Article 28 (Resolution, etc. of General Meeting of Policy Holders)
(1) The general meeting of policy holders shall resolve on changing the articles of incorporation and other matters necessary for the organiza- tion of the relevant mutual company.
(2) The resolution provided for in the provisions of Article 21 (1) may be changed into the resolution referred to in paragraph (1). In this case, such change shall not undermine the interests of creditors of the rele- vant stock company.
age to shareholders, an agreement thereon shall be obtained from the general meeting of shareholders. In this case, the provisions of Article 21 (2) shall be applied mutatis mutandis.
(4) The provisions of Article 316 (2) of the Commercial Act shall ap- ply mutatis mutandis to the resolution referred to in paragraph (1).
<Amended by Act No. 8520, Jul. 19, 2007>
Article 29 (Registration of Change in Organization)
(1) In the case that any stock company changes its organization, such stock company shall have its resolution registered and the relevant mu- tual company shall have its incorporation registered under the provi- sions of Article 40 (2), respectively, within 2 weeks from the date of such change in the locations of their headquarters offices or their principal offices and within 3 weeks from the date of such change in the locations of their branch offices or their sub-branch offices.
(2) Applications for registrations referred to in paragraph (1) shall be accompanied by the articles of incorporation, the publication provided for in Article 22 (1), the resolution and consent provided for in Article 28, the objection provided for in Article 141 (3) and documents attesting the completion of the procedures provided for in the provisions of Arti- cle 232 of the Commercial Act. <Amended by Act No. 8520, Jul. 19, 2007>
Article 30 (Membership Following Change in Organization)
The policy holders of any stock company shall be members of the rele- vant mutual company after a change in the former’s organization.
Article 31 (Application of Commercial Act, etc.)
The provisions of Article 145, Articles 40, 339, 340 (1) and (2), 439 (1), 445 and 446 of the Commercial Act shall apply mutatis mutandis to a change in the organization of the stock company. In this case, “Article 192” shall be deemed “Article 238” in Article 446 of the Commercial Act.
<Amended by Act No. 8520, Jul. 19, 2007>
Article 32 (Preferential Acquisition Rights of Policy Holders, etc.)
(1) Any policy holder or any person who is entitled to receive insurance money shall be granted the preferential right to acquire the amount accumulated for the insured from the relevant stock company’s assets, except as especially provided for in other Acts.
(2) In the case that any special account is set up in accordance with Ar- ticle 108, the provisions of paragraph (1) shall apply to such special ac- count separately from other accounts.
Article 33 (Preferential Rights to Repayment from Deposited Assets)
money shall take precedence over creditors in being granted the prefer- ential right to be repaid the amount accumulated for the insured from assets deposited by the relevant stock company on orders from the Financial Services Commission under this Act. <Amended by Act No. 8863, Feb. 29, 2008>
(2) The provisions of Article 32 (2) shall apply the case of paragraph (1).
SECTION 3 Mutual Company
Sub-Section 1 Incorporation
Article 34 (Matters To Be Entered in Articles of Incorporation)
The incorporators of any mutual company shall prepare the articles of incorporation, enter matters falling under each of the following subpar- agraphs in the articles of incorporation and then subscribe their names and affix their seals thereon:
1. The types of insurance business it intends to run and the scope of business;
2. Name;
3. The location of its office; 4. The total amount of the fund;
5. Rights to be held by investors in the fund;
6. Methods of depreciating the fund and incorporation expenses; 7. Ways of distributing the surplus;
8. Ways for the mutual company to publish;
9. If there are assets that the relevant mutual company agrees to ac- quire by transfer after its incorporation, the value of such assets and the name of transferor; and
10. The term of existence and the grounds of dissolution, if prescribed. Article 35 (Name)
Every mutual company shall use the letter, “the mutual company”, in its name.
Article 36 (Payment of Fund)
(1) The fund for every mutual company shall be paid in money, not in assets.
(2) The provisions of Articles 295 (1), 305 (1) and (2) and 318 of the Commercial Act shall apply mutatis mutandis to the payment of the fund. <Amended by Act No. 8520, Jul. 19, 2007>
Article 37 (Number of Members)
Article 38 (Instruments of Subscription for Membership)
(1) In the case that any person who is not an incorporator intends to be a member of the relevant mutual company, he shall enter his objectives and insurance amount in two copies of the instrument of subscription for membership and subscribe his name and affix his seal thereon: Pro-
vided, That the same shall not apply to any person who intends to be
a member after the incorporation of the relevant mutual company.
(2) Incorporators shall each prepare the instrument of subscription for membership referred to in paragraph (1) and enter matters falling under each of the following subparagraphs in the instrument of subscription for membership and then keep it:
1. The date on which the articles of incorporation is certified and the name of the notary public who certifies the articles of incorporation;
2. Matters referred to in each subparagraph of Article 34;
3. Names and addresses of investors in the fund and the amount of investment made by each of the investors;
4. Names and addresses of incorporators;
5. If incorporators are remunerated, the amount of such remuneration;
6. The number of members intended to recruit at the time of incorpo- ration; and
7. In the case that the inaugural general meeting is not held by a cer- tain time, the purport that the instruments of subscription for mem- bership may be revoked.
(3) The provisions of the proviso of Article 107 (1) of the Civil Act shall not apply to the instruments of subscription for membership prior to the incorporation of the relevant mutual company. <Amended by Act No. 8520, Jul. 19, 2007>
Article 39 (Inaugural General Meeting)
(1) In the case that the payment of the fund is completed for the rele- vant mutual company and the number of members reaches the intended level, incorporators shall call without delay the inaugural general meet- ing.
(2) The inaugural general meeting shall resolve with the attendance of a majority of members and the concurrent of not less than three quarters of the voting right.
Article 40 (Incorporation Registration)
(1) Every mutual company shall have its incorporation registered within two weeks from the date on which its inaugural general meeting comes to a close.
(2) Matters falling under each of the following subparagraphs shall be entered in the registration of incorporation:
1. Matters referred to in each subparagraph of Article 34; 2. Names and addresses of directors and auditors; 3. Name of representative director; and
4. In the case that several representative directors jointly represent the company, the regulations governing the joint representation of the company.
(3) The registration of incorporation referred to in paragraphs (1) and (2) shall be made by joint applications of directors and auditors.
Article 41 (Register)
Every competent register office shall keep a register for mutual companies. Article 42 (Liability for Indemnifying Damage)
The liability for indemnifying damage caused to any mutual company by any director who illegally put a dividend agenda on the general meeting of members, unjustifiably loans money to other director or gets involved in illegal transactions shall not be exempted without the consent of the general meeting of members.
Article 43 (Lawsuit Filed Against Incorporators)
The provisions of Article 19 of this Act and Article 400 of the Commer- cial Act shall apply mutatis mutandis to incorporators of mutual com- panies. <Amended by Act No. 8520, Jul. 19, 2007>
Article 44 (Application of Commercial Act)
The provisions of Articles 10 through 15, 17, 22, 23, 26, 27, 29 through 33, 35, 37 through 40, 87 through 89, 91, 92, 171 through 173, 176, 177, 181 through 183, 288, 289 (3), 292, 310 through 316, and 322 through 327 of the Commercial Act shall apply mutatis mutandis to mutual companies. <Amended by Act No. 8520, Jul. 19, 2007>
Article 45 (Application of Non-Contentious Case Litigation Procedure Act)
com-panies. <Amended by Act No. 8520, Jul. 19, 2007>
Sub-Section 2 Rights and Duties of Members
Article 46 (Indirect Responsibility)
The members of every mutual company shall not take any direct re-sponsibility to the creditors of their company.
Article 47 (Limited Liability)
The liability of the members of every mutual company for the debts of their company shall be limited to their insurance premiums.
Article 48 (Prohibition on Offset)
The members of every mutual company shall not oppose against the pay- ment of insurance premiums with offset.
Article 49 (Reduction of Amount of Insurance Money)
Every mutual company shall prescribe matters concerning the reduction of the amount of the insurance money in the articles of incorporation.
Article 50 (Succession of Life Insurance Contracts, etc.)
Any member of the mutual company that has been incorporated for the purpose of running the life insurance business and the third insurance business may have any other person succeed his right and duty after obtaining approval from his mutual company.
Article 51 (Transfer of Objectives of Damage Insurance)
In cases where any member of the mutual company that has been incorporated for the purpose of running the business of insurance against loss transfers the objectives of his insurance contract, the transferee may succeed the right and duty of the transferor after obtaining approval from the mutual company.
Article 52 (Roll of Members)
The roll of members of every mutual company shall contain matters fall- ing under each of the following subparagraphs:
1. Names and addresses of members; and
2. Kinds of insurance contracts, the amount of insurance money and insurance premiums of each member.
Article 53 (Notice and Peremptory Notice)
The provisions of Article 353 of the Commercial Act shall apply mutatis
mutandis to the instruments of subscription for membership of mutual
companies and notice as well as peremptory notice to each of their members: Provided, That the same shall not apply to the notice and peremptory notice of matters belonging to the insurance relationship.
Sub-Section 3 Agency of Company
Article 54 (Agency of General Meeting of Members)
(1) Every mutual company may prescribe an agency acting on behalf of the general meeting of members in the articles of incorporation.
(2) The regulations governing the general meeting of members shall apply
mutatis mutantis to the agency referred to in paragraph (1). Article 55 (Voting Right)
The members of every mutual company shall each have one voting right at the general meeting of members: Provided, That the same shall not be applied if the articles of incorporation carry any special regulations governing such voting right.
Article 56 (Right to Claim Call of General Meeting of Members)
(1) Not less than 5/100 of the members of every mutual company may submit a document containing the agenda of the general meeting of mem- bers and the grounds of calling such general meeting of members to the board of directors to claim the call of the general meeting of members:
Provided, That the articles of incorporation may set standards for exer-
cising their rights.
(2) The provisions of Article 366 (2) and (3) of the Commercial Act may apply mutatis mutandis to the case of paragraph (1). <Amended by Act No. 8520, Jul. 19, 2007>
Article 57 (Keeping of Documents and Perusal, etc.)
(1) The directors of every mutual company shall keep the articles of incorporation and minutes of the general meetings of members and the board of directors at its office and the roll of members at its principal office.
(2) The members and creditors of every mutual company may peruse or copy documents referred to in paragraph (1) at any time during busi- ness hours and claim the delivery of certified or abridged copies after paying expenses set by the company.
Article 58 (Exercise of Minority Members’ Rights)
The provisions of Article 19 shall apply mutatis mutandis to mutual companies. In this case, “the total number of shares issued” and “persons who holds shares under the conditions as prescribed by the Presidential Decree” shall be deemed “the total number of members” and “members,” respectively.
Article 59 (Application of Commercial Act, etc.)
the Commercial Act shall apply mutatis mutandis to the general meet- ing of members of mutual companies. <Amended by Act No. 8520, Jul. 19, 2007>
(2) The provisions of Articles 382, 383 (2) and (3), 385, 386, 388, 389, 393, 395, 398, 399 (1), 401 (1), 407 and 408 of the Commercial Act shall apply mutatis mutandis to directors of mutual companies. <Amended by Act No. 8520, Jul. 19, 2007>
(3) The provisions of Article 19 of this Act and Articles 382, 385, 386, 388, 394, 399 (1), 401 (1), 407, 410 through 413-2 and 414 (3) of the Commercial Act shall apply mutatis mutandis to auditors of mutual companies. <Amended by Act No. 8520, Jul. 19, 2007>
Sub-Section 4 Accounting of Companies
Article 60 (Reserve for Making Up for Losses)
(1) Every mutual company shall accumulate the reserve to make up for losses from the surplus each business year.
(2) The total amount of the reserve referred to in paragraph (1) and the minimum amount of the reserve to be accumulated each year shall be prescribed by the articles of incorporation.
Article 61 (Restrictions on Payment of Interest Accruing from Fund, etc.)
(1) Every mutual company shall pay the interest accruing from the fund only after it makes up for losses with such interest.
(2) The depreciation of the fund or the distribution of the surplus shall be made only after incorporation expenses and the total amount of work- ing expenses are depreciated and the reserve provided for in Article 60 (1) is deducted.
(3) In the case that the interest accruing from the fund is paid, the fund is depreciated or the surplus is distributed in violation of the provisions of paragraphs (1) and (2), the creditors of the relevant mutual company may have such payment, depreciation and distribution refunded.
Article 62 (Reserve for Depreciating Fund)
In the case that the fund is depreciated, an amount equivalent to the depreciated amount shall be replenished.
Article 63 (Distribution of Surplus)
In the case that the articles of incorporation carries no special regula- tions governing the surplus, the surplus shall be distributed to mem- bers at the end of each business year.
Article 64 (Application of Commercial Act)
companies. <Amended by Act No. 8520, Jul. 19, 2007>
Sub-Section 5 Change in Articles of Incorporation
Article 65 (Change in Articles of Incorporation)
(1) Any change in the articles of incorporation of every mutual company shall be made upon a resolution of the general meeting of members.
(2) The provisions of Article 55 of this Act and the Articles of 363 (1) and (2), 364, 368 (3) and (4), 371 (2), 372, 373, 376 through 381 and 433 (2) of the Commercial Act shall apply mutatis mutandis to the case of paragraph (1). <Amended by Act No. 8520, Jul. 19, 2007>
Sub-Section 6 Resignation of Members
Article 66 (Grounds of Resignations)
(1) Every member of mutual companies shall resign from his company on the grounds falling under each of the following subparagraphs:
1. The grounds prescribed in the articles of incorporation accrue; and 2. The insurance relationship is terminated.
(2) The provisions of Article 283 of the Commercial Act shall apply mu-
tatis mutantis to the case of the death of a member of any mutual com-
pany. <Amended by Act No. 8520, Jul. 19, 2007>
Article 67 (Right to Claim Refund)
(1) Any member who resigns from his mutual company may claim the refund of an amount belonging to his right under the conditions as pre- scribed by the articles of incorporation or his insurance clause.
(2) In the case that any member who resigns has a debt owed to his mu- tual company, the relevant mutual company may deduct such debt from the amount referred to in paragraph (1).
Article 68 (Refund Deadline and Prescription)
(1) The refund of an amount belonging to the right of any member who resigns from his mutual company shall be made within 3 months from the date on which the business year belonging to the date of his resig- nation comes to an end.
(2) The right to claim the refund by any member who resigns from his mutual company shall, if not exercised for 2 years after the lapse of the term referred to in paragraph (1), be terminated by prescription.
Sub-Section 7 Dissolution
(1) Any mutual company shall, if it resolves to dissolve itself, publish a summary of the resolution and its balance sheet within 2 weeks from the date on which such resolution is authorized in accordance with Ar- ticle 139.
(2) The provisions of Articles 141 (2) through (4), 145 and 149 shall apply to the case of paragraph (1).
Article 70 (Application of Commercial Act)
(1) The provisions of Articles 174 (3), 175 (1), 228, 232, 234 through 240, 522 (1) and (2), 526 (1), 527 (1) and (2), 528 (1) and 529 of the Commercial Act shall apply mutatis mutandis to mutual companies. In this case, “Article 317” in Article 528 (1) of the Commercial Act shall be deemed “Article 40 of the Insurance Business Act”. <Amended by Act No. 8520, Jul. 19, 2007>
(2) The provisions of Article 39 (2) shall apply mutatis mutandis to the selections and appointments provided for in the provisions of Article 175 (1) of the Commercial Act. <Amended by Act No. 8520, Jul. 19, 2007>
Sub-Section 8 Liquidation
Article 71 (Liquidation)
Any mutual company shall, if it is dissolved, be liquidated in accordance with the provisions of this Sub-Section with the exception of the case of merger and bankruptcy.
Article 72 (Order of Disposal of Assets, etc.)
(1) The liquidator of the relevant mutual company shall dispose of its assets according to the order falling under each of the following sub-paragraphs:
1. The repayment of general debts;
2. The payment of insurance money to members and the payment of the money required to be refunded to members under Article 158 (2); and
3. The depreciation of the fund.
(2) The remainder of assets shall, if the articles of incorporation of the relevant mutual company does not specially prescribe, be distributed to members in the same ratio as that of the surplus distribution.
Article 73 (Application of Commercial Act, etc.)
408, 411 through 413, 414 (3), 448 through 450, 531 through 537, 539 (1), 540 and 541 of the Commercial Act shall apply mutatis mutandis to the liquidation of mutual companies. <Amended by Act No. 8520, Jul. 19, 2007>
S
ECTION 4 Local Bran
ch Offices of Foreign InsurersArticle 74 (Revocation of Licenses for Local Branch Offices of Foreign Insurers, etc.)
(1) In the case that the principal office of any foreign insurer falls under any of the following subparagraphs, the Financial Services Commission may revoke the license of the insurance business for the local branch office of such foreign insurer after going through hearing: <Amended by Act No. 8863, Feb. 29, 2008>
1. When the principal office is shut down by merger or the transfer of business, etc.;
2. When the principal office is subject to a measure equivalent to a disposition provided for in Article 134 (2), which is taken by any for- eign financial supervisory agency on the grounds of its illegal act and unfair business practices; and
3. When the principal office suspends its business or ceases to do its business.
(2) In cases where the principal office of any foreign insurer falls under paragraph (1), the local branch offices of such foreign insurer shall report such fact to the Financial Services Commission within seven days from the date on which the grounds thereof occur. <Amended by Act No. 8863, Feb. 29, 2008>
Article 75 (Obligation to Hold Local Assets)
The local branch offices of foreign insurers shall hold assets equivalent to the liability reserve and the emergency-risk reserve accumulated in accordance with Article 120 in the Republic of Korea to guarantee the fulfillment of insurance contracts concluded in the Republic of Korea.
Article 76 (Representatives of Local Branch Offices)
(1) The provisions of Article 209 of the Commercial Act shall apply mu-
tatis mutandis to the local branch offices of foreign insurers. <Amended by Act No. 8520, Jul. 19, 2007>
(3) The representatives of local branch offices of foreign insurers shall be deemed officers of insurance companies provided by this Act.
Article 77 (Persons in Charge of Clearing Up Remaining Business)
(1) In the case that the principal office of any foreign insurer, whose local branch offices have been each granted a license to run the insurance busi- ness in accordance with Article 4, ceases to do the insurance business or is dissolved, or ceases to do the insurance business in the Republic of Korea or the licenses of such local branch offices are revoked, the Financial Services Commission may, if it is deemed necessary, select and appoint or dismiss persons in charge of clearing up the remaining business. <Amended by Act No. 8863, Feb. 29, 2008>
(2) The provisions of Article 76 (1) and 157 shall apply mutatis mu-
tandis to the persons in charge of clearing up the remaining business
referred to in paragraph (1).
(3) The provisions of Article 160 shall apply mutatis mutandis to the case of paragraph (1).
Article 78 (Registration)
(1) The provisions of Article 41 shall apply mutatis mutandis to local branch offices of any foreign insurer that is a mutual company (herein- after referred to as the “foreign mutual company”).
(2) When any local branch office of a foreign mutual company intends to file an application for its registration, the representative of such local branch office shall file an application stating its principal office in the Republic of Korea and the name and address of the representative of such principal office, accompanied by documents falling under each of the following subparagraphs:
1. Document attesting the presence of the principal office in the Re- public of Korea;
2. Document attesting the representative’s qualifications; and
3. Document discerning the articles of incorporation and the nature of the company.
(3) The documents referred to in paragraph (2) shall be each certified by any competent agency in the home country of the relevant foreign mutual company.
Article 79 (Application of Commercial Act)
