A policyholder of an indemnity health insurance policy underwent more than 2,500 surgeries to remove corns on the foot and received 700 million won from the insurer, then was sued twice by the insurer. The Supreme Court ruled in both suits that there was no problem with the insurance contract and the insurer must pay the surgical costs.
The Supreme Court's Third Division (presiding Justice Lee Sook-yeon) said on the 25th that on the 12th of last month it overturned lower court rulings favoring the insurer in a suit filed by insurer A against policyholder B, 42, seeking confirmation of the nonexistence of debt and in a separate suit filed by B against insurer A seeking insurance benefits, and remanded the cases to the Seoul High Court.
B signed a contract with insurer A in July 2016. It was an indemnity health insurance policy that covered death and residual disability from general injury, residual disability from illness, fracture diagnosis benefits, and injury surgery costs. B paid a monthly premium of 63,429 won and was to receive 300,000 won per illness-related surgery.
In September 2016, two months after enrolling, B was diagnosed at a dermatology clinic with corns and calluses on the toes and soles and underwent cryoablation to remove the corns.
As B continued to receive cryoablation for corn removal, insurer A filed suit in December 2018, arguing that "this insurance contract is void." The claim was that it violated Article 103 of the Civil Act, which provides, "A juristic act contrary to good morals or other social order is void." Up to that point, B had received 125.7 million won in illness surgery insurance benefits. In effect, B had undergone corn removal surgery every other day.
After the suit was filed, B continued to receive cryoablation for corn removal. From the first surgery through March 2023, over six years and six months, B underwent a total of 2,575 procedures. That is 1.1 per day. B received 772.5 million won in benefits from insurer A. From enrollment until then, B had paid a total of 5.13 million won in premiums.
Meanwhile, the first trial ruled against insurer A. The first-instance panel found, "There is insufficient basis to recognize that B entered into the insurance contract with the purpose of fraudulently obtaining benefits, and cryoablation constitutes surgery as defined in the special terms of this insurance contract." The appellate ruling was the same, and in May 2021 the Supreme Court dismissed the insurer's appeal, finalizing the insurer's loss.
After that, insurer A filed suit against B again. The insurer argued that the contract was void under Article 130 of the Civil Act because B entered into multiple insurance contracts for the purpose of unjustly obtaining benefits. The insurer also claimed the contract was void because B had symptoms of corns before enrolling.
In this suit, the first trial sided with insurer A, holding the contract void. The first-instance panel said, "It is presumed that B entered into multiple insurance contracts for the purpose of fraudulently obtaining benefits. It is reasonable to deem the contract void."
The first-instance panel based its finding on the facts that B had not paid income tax from 2012 to 2021 and had received insurance benefits a total of 1,038 times from multiple insurers, including insurer A, from 2016 to 2022.
One medical institution told B, "After receiving cryoablation once, rest for two months and get treatment at three-week intervals." However, for years B visited multiple medical institutions on nearly every day except Sundays and holidays to receive cryoablation. The first-instance panel said, "B did not receive fundamental treatment and instead received only cryoablation at low intensity virtually indefinitely." The appellate court maintained the same finding.
The Supreme Court, however, reached a different conclusion. First, it held that insurer A could not advance arguments that conflicted with the 2021 final judgment. It also found that the evidence presented by the insurer—such as B's enrollment in multiple policies—could not be regarded as new facts inconsistent with the prior rulings.