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Many insurance agents receive a clawback notice after being dismissed or after their appointment contract ends, demanding that they "return the commissions and support payments already paid." Because the amounts are often large, the first question is usually whether to simply pay. However, the fact that the company has demanded repayment does not by itself make that amount final. What matters is whether the company has a contractual or regulatory basis for the demand, and whether that basis is legally effective.

In the video, we picked five types of clawbacks in order of how much room there is to dispute them. The order is only meant to make the issues easier to follow; the actual outcome depends on the appointment contract, the payment and clawback rules, and how the contract came to an end. This article organizes those five points around the governing statutes and a recent Supreme Court ruling.

[Contents]

1. The Starting Point — Is There a Basis for Demanding Repayment?

2. Clawback Clauses That Were Never Explained — The Duty to Explain Standard Terms and Its Limits

3. Clawbacks With Unclear Calculations, and Operating or Incentive Payments With No Clawback Rule

4. "Full Clawback Regardless of Cause" Clauses — The 2025 Supreme Court Ruling and Settlement Support Payments

5. Advance Settlement Commissions When the Contract Ended Because of the Company's Unfair Conduct

6. What to Check First If You Receive a Clawback Notice

The Starting Point — Is There a Basis for Demanding Repayment?

The commissions and various support payments an insurance agent receives are paid under the appointment contract and the company's payment rules. Which payments may be clawed back, and in what circumstances, is in principle a matter for the parties to agree on, but that does not mean the company may set those terms without any limits.

Article 85-3(1)(vii) of the Insurance Business Act (보험업법) prohibits insurance companies, insurance agencies and insurance brokers, as an unfair practice, from clawing back commissions paid to an insurance agent without justifiable cause. The Supreme Court has held that because this provision aims to protect agents' interests and secure stable sales activities, its purpose must be fully taken into account when interpreting and applying appointment contracts and clawback rules (Supreme Court Decision 2023Da309679, August 14, 2025).

So when you receive a clawback notice, the first step is not the amount but the question: "Under which provision is this item being clawed back?"

Clawback Clauses That Were Never Explained — The Duty to Explain Standard Terms and Its Limits

Appointment contracts and payment and clawback rules that a GA or insurer prepares in advance to contract with many agents may qualify as standard terms. Article 3(3) of the Act on the Regulation of Terms and Conditions (약관의 규제에 관한 법률) requires a business to explain the important contents of its standard terms so that the customer can understand them, and Article 3(4) provides that if a contract is concluded in violation of this duty, the business may not assert those terms as part of the contract.

Clawback conditions are important terms that impose a financial burden on the agent. If you were not properly told about the clawback conditions when you were appointed, you may be able to dispute a clawback claim based on that clause.

There are limits, however. The Supreme Court holds that even for matters set out in standard terms, there is no duty to explain matters that are common and generally accepted in the trade, such that they could have been fully anticipated without a separate explanation. In Decision 2023Da309679 above, the lower court's finding that a rule stating "commissions on policies cancelled following a complaint are clawed back 100%" applied to the agents even though it had not been explained was left undisturbed. Because a breach of the duty to explain will not by itself block every clawback, it should be reviewed together with the other issues below.

Clawbacks With Unclear Calculations, and Operating or Incentive Payments With No Clawback Rule

A clawback is money that the company is claiming from the agent. Whether a clawback event actually occurred, and on what basis the amount was calculated, are matters the claiming company must support with records. If the company cannot produce objective materials such as the list of cancelled policies, the clawback rate for each policy and the calculation of retention rates, a dispute may arise over whether the notified amount must be repaid as stated.

Money paid to encourage sales, such as operating expenses or incentive payments, can raise a more fundamental problem. If the payment rules contain no clawback clause at all for these items, you should first examine what the company is relying on to demand repayment. Rather than treating settlement support, commissions, operating expenses and incentives as a single lump sum, it is important to check the underlying provision item by item.

"Full Clawback Regardless of Cause" Clauses — The 2025 Supreme Court Ruling and Settlement Support Payments

Even if a clawback clause exists and applies to the agent, its validity can be challenged if its content is excessively one-sided. Article 6(1) of the Act on the Regulation of Terms and Conditions makes void any standard term that has lost fairness in violation of the principle of good faith, and Article 6(2)(i) presumes that a term unfairly disadvantageous to the customer has lost fairness.

Supreme Court Decision 2023Da309679 (August 14, 2025) concerned an insurance agency's internal rule stating that "complaint cases are clawed back 100%." The Court pointed out that, read literally, the rule would allow the agency to claw back all commissions already paid without asking what the complaint was about, whether the policyholder's reason for cancellation was justified, or who was at fault for the cancellation, and that there was no proper basis or procedure for the agent to present an opinion in that process. It held that if all commissions could be clawed back without any limit merely because a policy was cancelled following a complaint, that would be unfairly disadvantageous to the agent and inequitable, and it reversed the lower court's ruling that the rule was not unfair and remanded the case.

The same perspective can be applied where an agent is asked to repay the full settlement support payment after a forced dismissal. If the company dismisses the agent unilaterally and then demands full repayment regardless of the reason for dismissal or who was at fault, the question may arise whether that agreement is a term unfairly disadvantageous to the agent. The outcome depends on the specific terms and the circumstances of the dismissal, so the appointment contract and the settlement support agreement should be reviewed together.

Advance Settlement Commissions When the Contract Ended Because of the Company's Unfair Conduct

Settlement commissions and advance commissions are usually paid up front on the premise that the agent will remain active for a certain period, with an agreement to repay them if the contract ends earlier. But if the contract ended not because of the agent but because of the company's unfair conduct, the situation may be different.

Article 150(2) of the Civil Code (민법) provides that where a party who would benefit from the fulfillment of a condition brings about its fulfillment contrary to good faith, the other party may claim that the condition has not been fulfilled. If the company has driven the contract to termination through unfair conduct and then argues that the repayment condition of "termination within the period" has been met, the agent may consider disputing that the repayment condition has been fulfilled. The prohibition on clawbacks "without justifiable cause" in Article 85-3(1)(vii) of the Insurance Business Act is also relevant.

On this issue, the circumstances leading to the termination are the key evidence. Keep every record of the measures the company took, the termination notice, and related messages and emails.

What to Check First If You Receive a Clawback Notice

• Appointment contract — how the clawback conditions are set out in the contract, and whether they were explained to you when you signed

• Payment and clawback rules — whether there is an underlying provision for each item being clawed back, and when and how the rules were changed

• Clawback calculation — whether the company has provided records of the basis for the calculation, such as the list of affected policies, clawback rates and retention rates

• How the dismissal or termination came about — whose cause led to the termination, and whether you have kept the related notices and messages

It is advisable to request from the company, in writing, the basis for each clawback item and the calculation details. If you repay part of the amount or sign a repayment agreement without checking the basis, it may become harder to dispute later.

Cheongchul Law Firm directly handles disputes over insurance agency (GA) and insurance agent appointment contracts, dismissals and commission clawbacks. If you have received a clawback notice, please contact us through our consultation booking before you repay.

This post is provided for general legal information only and does not constitute legal advice on any specific matter. Outcomes vary depending on the facts of each case, so please consult a qualified professional.