Chinese Insurance Contracts: Law and Practice

Description

Chinese Insurance Contracts: Law and Practice is the first systematic text written in English on the law of insurance in China. This book offers a critical analysis of the major principles, doctrines and concepts of insurance contract law in China. At every point the analysis discusses the principles of the Insurance Law in detail, referring where appropriate to decided cases and also drawing attention to external influences. Readers are guided through the complexities of Chinese law in a clear and comprehensive fashion, and – significantly – in a manner that is accessible and meaningful for those used to a common law system. This book presents a comprehensive picture of Chinese insurance contract law, to facilitate a wider understanding of the relevant rules of law. Elements of insurance contract law are critically examined. In addition, this book presents rules of law on some special types of insurance contract, such as life insurance, property insurance, liability insurance, motor vehicle insurance, reinsurance, and marine insurance. The deficiencies and shortcomings of the law and practice will be identified and analysed; suggestions and recommendations on how to reform the law will be presented. Chinese Insurance Contracts also offers legal and practical advice to insurance professionals on how to draft clauses to avoid contractual pitfalls. It also uses cases to illustrate the difficulties which can arise in applying the principles in practice. This book will be essential reading for insurance companies and legal practitioners looking to do business in China, as well as reference for Chinese lawyers practising insurance law. It will also be a useful resource for students and academics studying Chinese law. Cover Half Title Title Copyright Contents Preface Foreword Table of cases Table of legislation Table of judicial interpretations Table of regulations International conventions and principles Chapter 1 Introduction to Insurance and China’s Insurance Industry 1.1 Introduction 1.2 The nature of insurance and insurance contracts 1.3 Classifications of insurance 1.4 The outline of this book 1.5 The history and development of China’s insurance industry 1.6 The top three insurance companies in China’s insurance market 1.7 The current insurance market in China 1.8 The further development of the insurance industry 1.9 Conclusion Chapter 2 The Chinese Legal System and the Insurance Law 2.1 Introduction 2.2 Traditional underpinnings of Chinese law 2.3 A historical overview of the legal system 2.4 The legislative system 2.5 The judicial system 2.6 Insurance legislation in China 2.7 Conclusion Chapter 3 The Regulation of Insurance 3.1 Introduction 3.2 The statutory regulatory authority 3.3 The regulation on establishment of insurance companies 3.4 The regulation of corporate governance 3.5 The regulation of insurance business 3.6 Regulation of insurance intermediaries 3.7 Regulation of Internet insurance 3.8 The protection of insurance consumers 3.9 The Insurance Association of China 3.10 Conclusion Chapter 4 Formation of an Insurance Contract 4.1 Introduction 4.2 General principles for making an insurance contract 4.3 The usual steps for making an insurance contract 4.4 The time when a contract is concluded 4.5 Offer made by the insurer 4.6 Online formation of an insurance contract 4.7 Agreement on essential terms of an insurance contract 4.8 Formality of conclusion of an insurance contract 4.9 The intermediary’s role in the formation of an insurance contract 4.10 Insurance documents 4.11 The effectiveness of the insurance contract 4.12 Legal elements for the validity of an insurance contract 4.13 Commencement of the insurer’s liability 4.14 Consideration 4.15 Some trouble spots in the process of formation of an insurance contract 4.16 Conclusion Chapter 5 Terms of Contracts and Construction of the Terms 5.1 Introduction 5.2 Terms of insurance contracts 5.3 Construction 5.4 Conclusion Chapter 6 Premiums 6.1 Introduction 6.2 Payment of premiums 6.3 Grace of payment 6.4 Payment of premiums and reinstatement of a life policy 6.5 Consequences of late or non-payment of premiums 6.6 Premiums cannot be demanded by legal action in life insurance 6.7 Modification of premiums during the insurance period 6.8 The return of premiums 6.9 Conclusion Chapter 7 Insurable Interest 7.1 Introduction 7.2 The nature of the insurable interest in insurance law 7.3 Test of insurable interest – legally recognised interest and economic interest 7.4 Legal framework relating to insurable interests in China 7.5 Insurable interests in property insurance 7.6 Insurable interests in personal insurance 7.7 Insurer’s duty to check the existence of insurable interests at the time of the contract in life insurance 7.8 Conclusion Chapter 8 The Insured’s Duty of Disclosure and Representations 8.1 Introduction 8.2 The concept of good faith in Chinese law 8.3 The statutory law relating to the doctrine of disclosure 8.4 The way of performing the duty 8.5 The scope of the duty of disclosure 8.6 The duty of disclosure is on the insured only 8.7 The time when the duty is to be performed 8.8 Materiality 8.9 Material facts 8.10 Remedies for breach of the duty 8.11 Restrictions on the insurer’s defence of non-disclosure 8.12 Conclusion Chapter 9 The Insurer’s Pre-Contractual Duty of Good Faith 9.1 Introduction 9.2 The insurers’ duty to explain the content of the contracts 9.3 The insurer’s duty to clearly explain the exemption clauses 9.4 The insurer’s duty not to mislead the insureds 9.5 Conclusion Chapter 10 Increase of Risk During the Insurance Period 10.1 Introduction 10.2 The justification for the requirement of notification of an increase of risk 10.3 A material increase of risk 10.4 The way of performing the duty of notification 10.5 Is the duty of notification a statutory duty or a contractual duty? 10.6 Other factors activating the duty of notification 10.7 Remedies for the increase of risk 10.8 Consequences for breach of the duty of notification by the insured 10.9 Recommendations 10.10 Conclusion Chapter 11 Double Insurance and Contribution 11.1 Introduction 11.2 Chinese laws relating to double insurance 11.3 Two types of double insurance – broad sense and narrow sense double insurance 11.4 Elements of double insurance 11.5 The scope of the application of double insurance 11.6 The insured’s duty to notify the insurers where there is double insurance 11.7 The doctrine of contribution in double insurance 11.8 The insured’s right to claim in double insurance 11.9 Rateable proportion clauses and other relevant clauses 11.10 Return of premiums 11.11 Conclusion Chapter 12 Causation 12.1 Introduction 12.2 The nature of the principle of proximate cause 12.3 The application of proximate cause in China 12.4 Further development of the traditional rules of the doctrine of proximate cause by Chinese courts – proportionate payment 12.5 The exception (or limitation) on the application of the doctrine of proximate cause 12.6 Burden of proof for proximate cause 12.7 Recommendations for incorporating the doctrine of proximate cause in Chinese law 12.8 Conclusion Chapter 13 Risk Prevention and Loss Mitigation 13.1 Introduction 13.2 Risk prevention 13.3 Loss mitigation 13.4 Conclusion Chapter 14 The Making of a Claim 14.1 Introduction 14.2 The insured’s duty to notify the insurer of the happening of the insured event 14.3 The insured’s duty to provide evidence and information relating to the claim 14.4 Practical procedures for making a claim 14.5 The limitation period 14.6 Conclusion Chapter 15 Settlement of Claims 15.1 Introduction 15.2 The insurer’s duty to pay valid claims in a timely manner 15.3 Compensatory damages for the insurer’s late payment of valid claims 15.4 Late payment of insurance proceeds under English law 15.5 Conclusion Chapter 16 Fraudulent Claims 16.1 Introduction 16.2 Statutory framework for insurance frauds 16.3 The types and effects of fraudulent claims 16.4 Fraudulent claims in life insurance 16.5 Criminal prosecutions 16.6 Criminal prosecution versus civil liability 16.7 Conclusion Chapter 17 Subrogation 17.1 Introduction 17.2 The nature and origin of subrogation in insurance contract law 17.3 The legal framework relating to subrogation in China 17.4 The insurer’s subrogation rights against the third party 17.5 The insured cannot make a profit 17.6 Subrogation and assignment 17.7 Distribution of subrogation recoveries 17.8 Persons immune from subrogation action 17.9 The insured’s duties under subrogation 17.10 Contractual duties versus statutory duties under subrogation 17.11 The limitation period for subrogation 17.12 Conclusion Chapter 18 Modification and Rescission of Insurance Contracts 18.1 Introduction 18.2 Modification of an insurance contract 18.3 Rescission upon agreement between the parties 18.4 An insurance contract can be rescinded by the proposer 18.5 The return of the cash value of the policy where the proposer rescinds a contract 18.6 The proposer rescinds the contract during the cooling-off period 18.7 Can a proposer rescind a contract after the insured event has occurred? 18.8 Circumstances under which the insurer is entitled to rescind an insurance contract 18.9 Rescission of a marine insurance contract 18.10 Contracts which cannot be rescinded by any party 18.11 Consequences for rescission of an insurance contract 18.12 Conclusion Chapter 19 Property Insurance 19.1 Introduction 19.2 Types of property insurance 19.3 Insurable interest in property insurance 19.4 Material facts in property insurance 19.5 The contents of a property policy must be explained by the insurer prior to entering into the contract 19.6 The assignment of the subject matter of insurance 19.7 The insured’s duties during the insurance period 19.8 Valued and unvalued policies 19.9 The insurer’s right of subrogation and the right to the damaged property 19.10 Risks covered and risks excluded in a property policy 19.11 Conclusion Chapter 20 Life and Accident Insurance 20.1 Introduction 20.2 Definition of personal insurance 20.3 Types of personal insurance 20.4 Parties in life insurance 20.5 Insurable interest in life insurance 20.6 Good faith in life insurance 20.7 Formation of a life insurance contract 20.8 The life insured’s consent as a condition precedent for the validity of a life policy 20.9 Suspension and reinstatement of a life insurance contract 20.10 Matters of beneficiaries in life insurance 20.11 The change of a beneficiary in life insurance 20.12 Whether the beneficiary’s name must be inserted into the policy 20.13 Circumstances under which insurance money is disposed as the life insured’s estate 20.14 The refund of the cash value of the policy 20.15 Whether the consent of the life insured or the beneficiary must be obtained where the proposer rescinds the contract 20.16 Whether a beneficiary should possess an insurable interest in the life insured 20.17 Consequences for the situation where the proposer or the beneficiary murders the life insured 20.18 The life insured commits suicide 20.19 Prohibition of insurance on a person without capacity for civil acts 20.20 Payment of premiums for personal insurance 20.21 Assignment of life policies 20.22 The transfer of the beneficial right in life insurance 20.23 Subrogation does not apply to life insurance 20.24 Conclusion Chapter 21 Liability Insurance 21.1 Introduction 21.2 Types of liability insurance 21.3 Statutory law governing liability insurance 21.4 The insured’s legal liability to the third party 21.5 The insurer’s liability to the insured 21.6 Legal force of settlement agreements 21.7 The prior discharge of the insured’s liability to the third party 21.8 The insurer’s direct payment to the third party 21.9 The third party’s right to sue the insurer for indemnity payments 21.10 The insurer’s liability for other costs 21.11 The insurer’s right of participation and duty of defending the insured 21.12 Conclusion Chapter 22 Motor Vehicle Insurance 22.1 Introduction 22.2 Compulsory motor insurance 22.3 The Road Traffic Accident Social Relief Fund 22.4 Non-compulsory commercial insurance 22.5 Conclusion Chapter 23 Reinsurance 23.1 Introduction 23.2 China’s reinsurance market 23.3 Legal framework for reinsurance 23.4 Definition and the nature of reinsurance 23.5 Functions of reinsurance 23.6 Types of reinsurance 23.7 Parties to a reinsurance contract 23.8 Contents of a reinsurance contract 23.9 Standard clauses in a reinsurance contract 23.10 Incorporation of terms from the original insurance contract 23.11 Rights and liabilities of the parties in a reinsurance contract 23.12 Scope of reinsurance business 23.13 Reinsurance and co-insurance 23.14 Principles in making a reinsurance contract 23.15 Regulations on reinsurance business 23.16 Conclusion Chapter 24 Marine Insurance 24.1 Introduction 24.2 Nature of marine insurance 24.3 Formation of the marine insurance contract 24.4 Obligations and liabilities of the insurer in marine insurance 24.5 Exclusions of the insurer’s liability 24.6 Obligations of the insured 24.7 Utmost good faith in marine insurance 24.8 Warranty in marine insurance 24.9 Insurable interests in marine insurance 24.10 Subrogation in marine insurance 24.11 Limitation period for actions 24.12 Doctrine of abandonment 24.13 Assignment of a policy in marine insurance 24.14 Double insurance in marine insurance 24.15 Conclusion Appendix 1 The Insurance Law of the People’s Republic of China Appendix 2 The Maritime Code of the People’s Republic of China Index