Generally, group insurance is the coverage of a number of individuals by means of a single, comprehensive or blanket policy. A group insurance policy has been defined as a contract between an insurer and an entity for the benefit of a group of people that has some relationship to that entity. The policies may be issued to an employer, association, or other qualified group.
Group policies are generally construed as creating a contract of insurance between the employer and the insurer, but for the benefit of the insured employees. Group insurance is not indemnity insurance for the benefit of the employer, but insurance upon the life of the employee for his or her personal benefit and the protection of those depending upon the employee.
But Article 735-3 at the present and Revised Bill of Korean Commercial Act (2008) provides that in case where, according to a covenant, an organization effects a life insurance contract in which the whole or part of its members are the insured, the provisions of article 731 shall not be applicable. As the results, it can be construed as that the entity or the employer, named as the insurance policyholder, can designate the beneficiary of group insurance contract, and interpreted as that the written consent of the insured can be excluded in the case that group insurance contract is concluded by the collective labour agreement. Therefore the employer or the entity designates his ownself as the beneficiary of the amount insured, and the employee has not a right about the amount. But legal interpretation as such, has a various problems about that of group insurance contract.
Therefore, this paper has a purpose to propose that Article 735-3 at the present and Revised Bill of Korean Commercial Act, must be accepted to the way that employees are the beneficiary of the amount insured in the group insurance contract. Especially this paper proposes that Article 735-3 will be eliminated.