Research On Incontestable Clause In Contract Of Insurance Of The Person

Incontestable clause is a special term in contract of insurance of the person contract, which means when the insurance contract entry into force, then after a certain period, insurer should not allege to rescind the contract and bear no payment of the insured amount, for the reason of the policy holder breach the obligation to disclose. This measure incarnates the legislation spirit of protecting the insurant firstly and deserves the reference of our insurance legislation. Therefore,《Insurance Law Of The People's Republic Of China》adopted incontestable clause in the amendment which went into force as of October 1,2009.Based on several basic elements, incontestable clause is defined in several presentations by scholars at home and abroad. From the history, incontestable clause was a unilateral commitment to waive part of the defense of the rights, which was created by insurance companies in order to overcome the crisis of public trust, and has experienced a long-time development from the agreed term to usage of trade, then becoming the statutory provision.For the insurance contract has the characteristics of asymmetric information, the applicant often bears the harsh obligation of informing, resulting the imbalance of the rights and obligations between the applicant and the insurer.Incontestable clause breaks through the general theory of contract law, with the restrictions of the right to rescind a insurance contract on the insurer, which effectively makes up for the defects of utmost good faith principle, not only helps to regulate the conduct of insurance contracting parties, but also significantly protects the applicant and the insured's reasonable expectations and reliance interests for long-term life insurance contracts of the person.Early incontestable clause was an express waiver, but today's incontestable clause has been as an independent insurance statutory rule. The origin of incontestable clause was related to warranties in marine insurance, though the influence from the duty of disclosure system is longer and deeper.From the legislative patterns of incontestable clause in different countries, incontestable clause is showing a widening scope of application, including insurance coverage, fraud, and more kinds of insurances.Against the domestic insurance companies abusing the right to rescind the contract,< Insurance Law> Article 16, paragraph 3 states:"The right to rescind the contract as specified in the preceding paragraph shall be extinguished if it is not exercised within 30 days, after the date on which the insurer learnt of the reason for termination. Once two years have lapsed from the date of formation of the contract, the insurer may not terminate the contract. If an insured event occurs, the insurer shall bear the obligation of paying indemnities or insurance benefits."This provision uses a double standard to be the calculation starting of contestable period, and covers all types of insurance contracts, breach of the duty of disclosure in all situation, and even the insurance contracts formed before< Insurance Law> newly revised went into force, in order to strengthen the protection of the applicant and the insured's interests.The legislation of incontestable clause may exert both positive and negative influences. On the one hand, incontestable clause helps to protect the applicant and the insured's interests, maintain the insurance policy of credit safety, reduce the dispute arising from insurance contracts, and promote the long-term healthy development of the insurance companies; on the other hand, incontestable may result a significant increase in moral hazard, obstruct the development of insurance companies in a short time, even indirectly damage the interests of applicant.The author believes that the legislation of incontestable clause is a step forward, but by comparison to the development of insurance market and social credit standing in China, the level of protection for applicant from incontestable clause exceeds too much. So incontestable clause should be restricted, that the application only includes insurance contracts of the person, excluding the four situations of fraud, premiums nonpayment, no insurable interests and the insured has d.Traditionally the research of incontestable clause often focus on protecting the interests of applicant, ignoring the risk that the insurer may bear. From the perspective of both the applicant and the insurer, this study pay attention to the balance of the interests of the applicant and the insurer, that is the novelty of this article. In addition, the analysis of incontestable clause in current insurance market, has some reference value.