Research On Legal Regulation Of Personal Insurance Innovative Products

Research on Legal Regulation of Personal Insurance Innovative ProductsInsurance industry features dispersing and managing business risks, hence highly relevant to the daily life. By purchasing insurance products, persons can scatter sudden disaster and risks in life. And the motivation of the blooming insurance lies in the innovation of insurance products. Over a long period of development, personal insurance products have played an effective role in protecting life and health of humans, their supportive function also becoming a stabilizer for society. With the global financial integration in recent years, insurance industry has presented a trend of expanding to new market. Insurance firms have developed some insurance products that serve the investment function, which indicate their embarking on non-insurance field. The field of life insurance, in particular, is where the firms developed various investment-attached insurance products such as investment-linked insurance, insurance with dividend, omnipotent insurance, by considering the individualistic features of traditional personal insurance products. The innovation of these products brings a great impetus to the acceleration of insurance market development. Meanwhile, however, some social problems are accompanied. Thanks to their professional advantages in insurance financial field, insurance firms play a dominant role in information acquisition. It is very often in practice that an innocent insurance product consumer has to bear the loss after purchasing unaffordable products because he or she is untold necessary information or misled by insurance agents'product promotion. Furthermore, the emergence of various investment insurance innovative products brings about structural risk in the insurance market, making the market deviate from the fundamental role of protection and vulnerable to potential crises. This paper is focused on the legal solutions to the regulation of innovative products on personal insurance. In other words, the author attempts to solve the issue of legal regulation of personal insurance innovative products from the aspect of legal supervision.The essay can be divided into five chapters in terms of its content and structure. Chapter 1 is Legal Regulating Body for Innovative Products of Personal Insurance. The essay firstly analyzes the innovative products of personal insurance qualitatively, clarifying the legal attribute of innovative products by the comparison between innovative products and traditional insurance products, the comparison among innovative products and the comparison between innovative products and financial products. Moreover, the essay analyzes the legitimacy of legal regulation of innovative products theoretically. There is abundant theoretical support of legitimacy of legal regulation of innovative products from jurisprudence and economics. The legal regulation of innovative products reflects the mandatory restraint of law, which is also the requirement of the reconfiguration of innovative products for legal standard. The asymmetric information of the two parties is achieved through regulation, making the trade fair. Finally, the essay analyzes the necessity of legal regulation for innovative products of personal insurance from the practice. In reality, the transaction risks increased by innovative products make some structural changes in insurance market, bringing new challenges to the insurance supervision. Applicants are the buyers of innovative products as well as the investors of its new products'function realization. The related interests of applicants need laws for protection.Chapter 2 is the Examination of Contract Terms for Innovative Products of Personal Insurance. The chapter states the setting and explanation of contract terms of new products from the aspect of policy contract of innovative products of personal insurance. On one hand, the chapter discusses how to set contract terms of innovative products of personal insurance fairly. Innovative products are basically in forms of standard forms. Compared with the contract terms of traditional insurance products, the contract terms of innovative products add terms related to investment.The formatting of innovative products has both advantages and disadvantages.The regulation of standard terms should be set from the aspect of legislation, judicature and administration to achieve the justice. On the other hand, the essay states how to apply the reasonable explanation principle to solve the problem of protecting the applicants'interests.Besides the application of common explanation principle for contract, unfavorable explanation principle should be applied properly to explain the policy contract terms of new products considering the particularity of insurance contract. Apart from the unfavorable explanation principle, proper expectation principle can be used to protect the legitimate interests of applicants. In addition, the contract terms of innovative products should be popularized, making the applicants know more clearly the characteristics and risks of the innovative products they have bought from the origin and protect rights of the consumers of the new products better.Chapter 3 is Legal Regulation of Risks Allocation for Innovative Products of Personal Insurance. This chapter reanalyzes the allocation of risks of the two parties with legal relationship. Innovative products differ from traditional products in terms of risk allocation. The new added investment risks leave more risks to applicants than to insurer. The rights and obligations set by traditional insurance products cannot meet the requirement from the risk allocation of innovative products as the applicants are getting more advantages in investment information. Therefore, the rights and obligations of the two parties should be reset. For insurer, the original obligations of disclosing information and explaining need to be expanded to broaden the obligation of insurer in disclosing information and explaining. For the applicants, the applicants'rights of knowing, option and acquiring compensation about innovative products need to be added. Also, the inequality of legal status of the two parties caused by asymmetric information should be added to protect the investment interests of applicants.Chapter 4 is the Model of Legal Regulation for Innovative Products of Personal Insurance. There are 3 points in this chapter. Firstly, the essay states the supervision model of innovative products of personal insurance by analyzing the insurance supervision model of developed countries and the choice direction of the insurance supervision model in our country. Expliciting the establishment of supervision system that focuses on solvency is a reasonable way of supervising innovative products effectively. Secondly, it discusses the choice of the examination procedure and examination model from the aspect of market access, premium rate and credit rating. For the regulation of market access, the examination of innovation product should shift from the strict examination beforehand to the record system afterwards, which reflects the encouragement of innovation and provides favorable policy environment and opportunities for product innovation. For the supervision of rate, Insurance regulators should loose the policy about the supervision of rate, take advantage of the rate lever to regulate the demand and supply relationship of insurance and increase the efficiency of insurance transaction, making the market play a leading role. Product credit rating system for innovative products should be instructed to make insurance companies pay more attention to their own images, operate the capital carefully and avoid risks from the inside of the companies. Finally, the essay clarifies how to regulate the intermediary service of innovative products of personal insurance. The intermediary service of innovative products includes agent, economic man and assessors. The effective supervision of these aspects is a guarantee of realizing the ultimate goal of insurance supervision as well as a foundation of protecting the interests of consumers.Chapter 5 is the Improvement of Legal Regulation System for Innovative Products of Personal Insurance. Firstly, the essay states the current development situation and legislation state of the innovative products of personal insurance in China. Innovative products of personal insurance develop late but rapidly. However, the corresponding legislation lags behind. Although insurance law in China experiences two great changes, the corresponding regulation of new products is still in short supply. Therefore, the regulation problems should be solved from the prospect of legislation. Secondly, the essay puts forward the perfection of legal regulation system of the innovative products of personal insurance from the aspect of legislation and supervision. The perfection of legal regulation system is a process of groping. In this process, we not only need to borrow ideas from the advanced supervision model of foreign countries but also take the actual situation of our country into consideration and choose the appropriate regulation model for innovative products. Finally, the essay suggests strategic vision of the development of innovative products of personal insurance from Macro policy Angle and puts forward diversified supervision system. In the strategic choice, the focus should be the industry self-discipline problems which include establishing industry reputation within the whole industry and enhance risk management to realize the informatization of product evaluation system. The so-called supervision system realizes the effective supervision management from the macro, meso and micro levels, that is, the combination of supervision management of national government at macro level, cooperative supervision of insurance industry from self-regulatory organizations at meso level, and self-supervision of insurance companies at micro level. Diversified supervision system is a guarantee of the healthy development of innovative products, the stability of insurance market and the protection of the rights of consumers.