The Study Of Applicability Of The Principle Of Utmost Good Faith In Chinese Marine Insurance Act

The principle of utmost good faith firstly explicitly appeared in the Marine Insurance Act 1906 of Britain, and then was taken example by the countries of civil law system. This principle puts both parties of insurance contract into the equal standing and thus they could negotiate on the basis of benefit both, although they may not possess equal commercial power. However the essence of transaction is either party would going to make sure that the counterparty has disclosed all the information he knows. Supposing that either party holds back any information that need to be disclosed, the entire transaction would be null and void. There is no provision of the principle of utmost good faith in the Chinese Marine Insurance Act, but the principle of good faith, which reads more strict and explicit. Moreover the factual content of the principle of good faith seems familiar to the principle of utmost good faith. Thus some scholars consider that the principle of utmost good faith should be part of the Chinese Marine Insurance Act if it is gonging to be reformulated and should provide that either party violates this principle the counterparty could declare the contract invalid.According the study of the origin and the development of the principle of utmost good faith, the overlaps and conflicts between this principle and our law system, the native defects of this principle and the trend of both industry and the act of Marine Insurance, the article does not deem it necessary to explicitly provide this principle in the Chinese Marine Insurance Act.There are five parts in total.Part one:OverviewThis part mainly introduces the definitions, origins and developments of both the principle of utmost good faith and the principle of good faith, making it clear that both of them are the moral standards in the transactions in market economy.Part two:The defects of the principle of utmost good faith.This part studies the problems of the definition of the principle itself. It analyses the problems appears when the principle was applied and the defects in the design of responsibilities.Part three:The contradictions and conflicts between the principle of utmost good faith and our law system.This part focuses on the difference of legislation background and the connotation of law principles between China and Britain, the conflicts between the principle of utmost good faith and disposing rules in our Marine Insurance Act, and possible problems when this principle is applied to our law system.Part four:The international development trend of marine insurance business.This part mainly introduces the variation of risk-taking for insurer in modern marine insurance business and the shifting focus in marine insurance act. And all the above shows that bringing the principle of utmost good faith in would not match the development trend of marine insurance business and the Marine Insurance Act.Part five:ConclusionAccording summarizing the former four parts, this part concludes that the principle of utmost good faith should not be brought into the Chinese Marine Insurance Act.