Study On Liability Exemption Of Insurer In Japan

With the development of our society, it brings the increase of the amount of insurance disputes in which cases concerning moral risk dominate themselves obviously. In order to prevent their appearance, Japan prescribes rules to exempt insurer from their liabilities. It can be found in the provisions of 641st terms of Japanese Commercial Law which gives insurer exemption when the covered perils happen because of insurance applicant or insurant's malignant acts or gross faults. However, it is a discussion opened among Japan specialists on its legal basis and sphere of application. After listing arguable opinions of Japanese schools, this paper sums up the improvements our laws should adopt from Japanese ones. Both malignant act and gross fault are conditions which bring exemption to insurer in Japanese law, while in ours only the former one can exempt insurer. Since the later one can sometimes occur, cases of this category can be solved according to Japanese prescriptions and 45th term of our Contract Law.We should establish precaution system to prevent the risks from insurance immoral behaviors to reconcile the interest of insurer, insurance applicant and insurant with the moral value hidden in good faith deed. The control of law and morality together assures insurance contractors who must adjust their acts to honesty and credibility of their maximum profits.The paper can be divided into four chapters:The first chapter involves itself in the characters of the rules regarding the insurer's exemption in Japanese Commercial Law. It focuses on the validity of the insurance contracts with the clauses that proclaim differently from the above rules. Firstly, it describes the establishment of the rules historically. Both the old and new commercial laws compiled in 1890 and1899 respectively pay attention to it which is defined to be the 641st term by amendment of 1938. Secondly it explores the legislative intention. This section takes a panoramic picture of the characteristic of this system from the theories of general liability, lack of occasional condition, conditional contract, public interest and exclusion of subjective jeopardizes. Thirdly it checks Japanese insurance companies of their insurance clauses, only to find their difference from the 641st term. It is still in debate whether these clauses are void.The second chapter is the system that exempts insurer from their liabilities, with covered perils appearing from the malignant act or gross fault of insurance applicant or insurant.It is mainly concerned with the basis of the exemption. Five opinions are listed like below: (1) Theory of general liability. Under this theory, one must carry the outcomes of the covered perils himself, if they are the results of his act. The insurer trespass the lawful line if he give insurance indemnity to malignant party, but it is law for the party to get insurance proceeds of covered perils in spite of their gross fault, without the damage to the public interest. (2) Lack of occasional condition. Insurance contract will not take effect if the covered perils are man-made events. Malignant act hides intention in it, so it keeps insurer from liability. (3) Conditional contract. An insurance contract is a conditional contract with money payment. If the conditional terms occurred, the contract should give force. But it is regarded as never appear since it is the result of the malignant act or gross fault of insurer'counterpart. Thus insurer is exempted. (4) Public interest. It is an adductive element of covered perils, if the ones caused by malignant...