Resolutions To The Problems Facing The System Of The Compulsory Third Party Liability Insurance For Motor Vehicles Based On Non-fault Liability Principle

Road Traffic Safety Law of the People's Republic of China took effect on May1, 2004. It's the first-ever law on road traffic safety in China. The Law requires the state to practice the system of the compulsory third party liability insurance for motor vehicles. Since the law changed the traditional fault liability principle into the non-fault liability principle on dealing with road traffic accidents, argues occurred on whether it is reasonable to introduce non-fault liability principle into the handling of road traffic accidents and if we should take the present third party liability insurance for motor vehicles as compulsory insurance. This paper aims to answer these two questions. For the former one, the paper begins with the researches about the necessity, possibility and the legal theories of the adoption of the non-fault liability principle; then it points out that while implementing this principle, the fault which causes the accidents by pedestrians or non-motorized vehicles should be taken into consideration in order to decide the amount of compensation; and the article advises to establish relating laws and regulations as soon as possible to alleviate the negative influence on road traffic safety caused by the adoption of the principle. Then, for the latter question, the article argues that the present third party liability insurance for motor vehicles is a kind of commercial insurance even though the motor vehicle owners were forced by the local government to manage the insurance with insurance companies. But the paper also debates that both the Insurance and the Contract Law of the People's Republic of China ask to adopt the non-fault liability principle to decide the present third party liability insurance's coverage. Finally, this article discusses on some practical problem arising from the implementing of the compulsory insurance system.