Study On The System Of Insurance Subrogation

Subrogation, as an international practice in the insurance circle, has alreadyreceived legislative acknowledgement all over the world. After the insurer pays theinsurance compensation to the insurant, through performing the right of subrogation,he can get compensation from the third party who has the liability for restitution onthe accident. This can not only strengthen the insurance fund and insurer’s solvency,but it can also enhance the liability consciousness of the third party, thus the rate ofinsurance accidents can be reduced. After several centuries’ improvement, thesubrogation system has already formed a comparatively complete regime of law.Some developed countries, such as Britain and America have had a mature practicein the legislation and the administration of justice. However, the history of theinsurance industry of our country is too short. We have learnt a lot from Japan andGermany on initial insurance law clauses, but been greatly affected by Britain andAmerica on insurance practice. This makes it hard to form our own theoreticalsystem and causes difficulty in our understanding the marrow of subrogation system.Therefore we come across a lot of puzzles and problems in the practice of legislationand justice. Our country’s theoretical study on subrogation is not deep enough andit’s just about the introduction of definition, effect, the name for exercising and someother basic matters, however, we seldom discuss about the absence and contradictionof legislation or the puzzles in the justice practice process. Some textbooks oninsurance law only give a very brief introduction about subrogation system or justoffer analysis on certain minor aspect of its actual practice. In a word, we lack ofOmni-bearing research on subrogation system. This dissertation tries to introducemany methods, such as historical trace, comparative study, pragmatic analysis andlegal theory demonstration, discuss how to balance the interests of the insurer, the insured and the third party, and provide some reference for the legislation of ourcountry.The whole dissertation contains five chapters, and the main contents are asfollow:Charter one provides an general introduction to the system of insurancesubrogation, includes the historic evolution, legal characteristics and the legislationof all the countries, analyzes its rationale and social functions, does comparativeresearch on the right of subrogation and relative definitions, and tries to give ageneral portrayal of the whole system. The principle of subrogation, which finds itsorigin in the system of assignment in Roman law, has taken shape after thepregnancy, development and perfection of modern insurance industry. Mostcountries of both legal systems unanimously receive the principle in their statutes.The subrogation principle in the insurance setting is an inferior concept of theindemnity principle. The interrelation between the two illustrates the differencesbetween subrogation insurance and other insurances. This essay uses comparativeanalysis method to illustrate the differences between the right of subrogation andabandonment in marine insurance, insurance recovery and some other relativeconcepts.Chapter two analyzes the legal constitution of insurance subrogation, introducesthe “three stage theory” from the angle of substantive right, and discusses about thescope of the right of subrogation, extinctive prescription, and restrictions. The rightof subrogation exists when the property insurance contract is established. Becausethe third party is also responsible for the loss, after the insurant gets thecompensation, subrogation can be exercised to the third party. The whole process isknown as “three stage theory”. The scope of the subrogation right is based on thecompensation for the loss of insurance subject matters. The amount of insurer’ssubrogation is set according to the insurance contract. However, the insurant canenjoy the priority to the full insurance compensation regardless of the variety ininsurance contracts. In order to fully protect the insurant’s interest; we restrict the insurer’s exercising of subrogation right in terms of insurer’s qualification, noexercising right towards specific objects, and the amount of insurer’s subrogation.Chapter three discusses how the insurer exercises the right of subrogation fromthe angle of procedural right, such as under what condition, in whose name and towhom. With other legal requirements, insurer’s subrogation can be exercised to thethird party in insurer’s own name. This chapter also introduces British, American andour country’s juridical practices on the name for exercising the right of insurancesubrogation, analyzes the advantages and disadvantages of insurer’s exercisingsubrogation on his own name. The public law person cannot be the object ofinsurer’s exercising subrogation. In other words, insurer cannot perform the right ofsubrogation to the public law person according to national compensation law. There-insurer doesn’t have the right to exercise the right of subrogation to the third party,nor does he have the necessity to perform subrogation according to reinsuranceinstitution.Chapter four is about the maintenance of subrogation right. This chapter mainlyconcerns how an insurant’s abandonment, compromise, exemption and reinsuranceshared compensation influence subrogation. In addition, this chapter also discussesvolunteer settlement of claim, insurance contract and the right of subrogation. Aninsurer’s exercising the right of subrogation is essentially the insurant’scompensation request towards the third party. The third party could use the groundsof opposition towards the insurant to resist the insurer. The formation of the insurer’ssubrogation right includes three stages: existence, acquirement and exercising. Aninsurant can deal with the third party’s compensation requests according to thedifferences on stage. The insurer’s volunteer compensation doesn’t affect theestablishment of subrogation right. The courthouse shouldn’t take substantialinvestigation on insurance contract and allow the insurer’s flexibility when copingwith insurant’s compensation request.Chapter five introduces the classification, challenge, and reform of insurancesubrogation system. This chapter classifies insurance according to nature and analyzes the subrogation problems on indemnity insurance, investment insurance,intermediate type insurance, social insurance and policy insurance.Chapter six introduces after the middle of twenty, the rationality of insurancesubrogation encountered unprecedented challenge and query; some countries beganto limit the scope of subrogation in varied degree. After careful analysis, we can findthat the viewpoint has a lot of defects on theory and some obstacles difficult to clearaway. The insurance subrogation system is engendered by insurance, so thecorresponding reform can be only performed within the scope of insurance law. Thedirection of the reform should be about the protection of the insurant’s interest andnot increasing the third party’s burden to carry out obligations.