The Supreme Court rendered the 109-Tai-Shang-450 Decision of May 6, 2020 (hereinafter, the “Decision”), holding that since an insurer has no right to claim premium payment from an interested party, it certainly has no obligation to deliver a notice to an interested party to demand premium payment.
According to the facts underlying this Decision, Individual A, mother of the Appellee, obtained a permanent life insurance (hereinafter, the “Insurance Contract at Issue”) with a medical insurance rider and other insurance riders from the Appellant. The Appellee was hospitalized for one year due to his injury from a traffic accident and claimed insurance benefits from the Appellant pursuant to the Insurance Contract at Issue. The Appellant refused to pay the insurance benefits on the ground that the insurance at issue and its riders had been terminated after being suspended for over two years since Individual A, the applicant of the Insurance Contract at Issue, did not pay the insurance premium. The Appellee asserted that since he had not received a notice demanding premium payment before and after A’s death, the Insurance Contract at Issue and its riders should still be valid and the Appellant should pay the insurance benefits pursuant to the contract. The Appellee also sought to confirm the validity of the Insurance Contract at Issue and its riders in accordance with Article 247 of the Code of Civil Procedure and the covenants under the Insurance Contract at Issue and compel the Appellant to pay the insurance benefits.
According to this Decision, Article 116, Paragraph 2 of the Insurance Law provides that a notice demanding premium payment shall be delivered to the applicant or a person obligated to pay the insurance premium in his/her last known residence or domicile. The so-called applicant in such article refers to a person with an insurance interest in the subject matter of insurance who has applied to the insurer to enter into an insurance contract and is obligated to pay the insurance premiums. In addition, the first part of Article 22, Paragraph 1 of the Insurance Law provides that the insurance premiums shall be delivered by the applicant pursuant to the contract. This shows that the applicant is the target for the collection of insurance premiums by the insurer since the person obligated to deliver the insurance premiums is the applicant. Although Article 115 of the Insurance Law provides that an interested party may pay the insurance premiums for the applicant, still since this is a discretionary act and the insurer cannot claim insurance premiums from the interested party, the insurer is certainly not obligated to deliver a notice to demand premium payment.
It was further indicated in this Decision that since the original trial court surprisingly concluded in its decision that the recipients of a notice demanding premium payment from the insurer are not limited to the applicant and should also include interested parties such as the insured and beneficiary and made a determination unfavorable to the Applicant, the original decision was reversed and remanded to the high court.
Please note that after the original decision was reversed, the high court decision has not been posted on the website of the Judicial Yuan yet.