Discussion Of The Principle Of Utmost Good Faith Of Insurance Contract

Insurance Contract is considered to be special for that both of the contract parties face the risk of asymmetric information while signing the contract and the achievement of the purpose of contract shall rely on the contract parties'disclosure of information related to the contract with the utmost good faith. Therefore, the principle of the utmost good faith was established as one of the basic principle of insurance contracts and the basis of contract validation. The Insurance Law was amended in 2009 and the legal provision of the utmost good faith was improved in new Insurance Law, it is strengthened the protection of policy holders and the insured. Meanwhile, Insurance Companies face big challenge of risk control for the new Insurance Law. In order to achieve the relative balance between protection the interest of policy holders and insured and risk control of insurance companies, this paper expounds the principle of the utmost good faith combining with the new Insurance Law of China, discusses the application and improvement of the utmost good faith. This paper consists of three chapters.Chapter one defines the connotation of the utmost good faith principle, introduces its origin, and analyzes the reason of its establishment on the basis of insurance contract's speciality and honesty-faith. Chapter two expounds embodiments, in insurance contract, of the utmost good faith in detail, including 4 systems——disclosure, notification, incontestable clause, waiver and promissory estoppel. This chapter consists of 4 sections, respectively expounds the connotation, related legal provisions and theory. Besides, this chapter raises the question which shall be improved.Chapter three analyzes the legal provisions of disclosure, notification, incontestable clause, waiver and promissory estoppel in new Insurance Law, provides the suggestions on improvement of the relevant provisions in order to balance the interest of contract parties. The principle of the utmost good faith is the basic principle of insurance contract, and its implementation relies on a good honesty environment. At the end of this paper, the writer raises some suggestions on the construction of insurance system in order to ensure the sound development of insurance industry.