On Exercising The Right Of Claim Of Insurance Subrogation

The right of claim of insurance subrogation is one of the basic systems of Insurance Law, its tenet is to provide the double guarantee for the insured, and to ensure the sufficient compensation for loss of the insured. Meanwhile, to make sure that the insured would not benefit excessively because of the compensation. The insurer should subrogate the right to claim the compensation of the third person of in the scope of the compensation sum. In order to understand the insurance subrogation correctly, we must have precise cognition of the functions of insurance. The most fundamental and inherent function of insurance is to provide financial compensation for the insured, with the hope to keep the stability of social life. The right of claim of insurance subrogation, being one of the basic contents of insurance compensating system, must be perforated with the tenet of insurance. The thesis, through analyzing the case about the right of claim of insurance subrogation, expound with emphasis on the basic issues of exercising this right. The framework of the thesis is as follows:The first part introduces the relevant case of the right of claim of insurance subrogation, finding the point in dispute, which lies in the ascription of the responsibility, the insured or the property company, and whether the insurance agent possess the insurance subrogation. The verdict of the court makes a particular explanation, and analyzes the issue of the right of claim of insurance subrogation. We can have a general knowledge about this right, which is due to the third person's offence that causes the loss of the which causes the loss of the insurance object in the responsible range, the insurer, after paying the insurance according to the contract, have the right to be places as the insured, obtaining all the rights and compensation of loss as the insured.The second part makes statements on the right of claim of insurance subrogation. The earliest statement on this was advanced by the British Judge Lord Hardwicke in the case that Randal appealed Cackran. The insurance laws of every nation all prescribed the insurance subrogation, such as the Code of Mercantile Law of Japan, the Insurance Law of China, and the Insurance Law of Taiwan. The right of subrogation is the application of the creditor's rights alienating system in the juristic relations of insurance, which is a subjective alternation substantially. The transfer of the right virtually is the subjective alternation of the debt, and the occurrence of the insurance event means the occurrence of some civil liability, namely the occurrence of some civil legal relation or some change of it, and meanwhile it means the change of the responsibility for insurance and the occurrence of the responsibility of compensation. The principle of subrogation derives from the principle of indemnity, and can be considered as the necessary result of the principle of indemnity. The core of the principle is that the loss of the insured caused in the insurance accident, should be compensated according to the exact amount, which could financially renew the state just as that is before the accident.The third part introduces the implement of exercising the right of claim of insurance subrogation. Our Chinese Insurance Law didn't make it clear about whether the insurer exercises the right in the name of insurer or the insured, but the actual practices all adopt the method that the insurers exercise their rights on behalf of their own. From the actual practice point of view, they do in this way can predigest the proceeding, and promote the efficiency. Four conditions should be fulfilled when exercising this right. First, the accident happens in the responsible range; second, the insured should have right to claim for compensation to the third person; third, the insurer have paid the insured the insurance; fourth, the sum of right of subrogation is limited by the sum of insurance. Only meeting the four conditions could we exercise this right. It is prescribed in the 68th item of our Insurance Law that this right is limited to property insurance. Most of our scholars thinks that this right is appropriate for property insurance but not for personal insurance. However, lately there are scholars constantly claim that payment in life insurance, health insurance and medical, childbearing and in-hospital expenses in accidental injury insurance, belonging to indemnity, evidenced by the objective sum, can be considered to be applied to the right of subrogation. The author thinks that inappropriate to exclude the application of this right in personal insurance, for the accidental injury insurance and health insurance in personal insurance are compensatory to some extent. Certainly in the insurance subrogation, the insured should be responsible for the assistant duty.The fourth part expounds the confinement and abandonment of the right of claim of insurance subrogation in practical use. The confinement is embodied in the confinement of the exercising object, the exercising time limitation, and the orders of being compensated. The subject of duty in exercising the right must be the third person who is responsible for the compensation, but when the accident is attributed to the actions of the family members of the insured, the insurer cannot exercise this right, unless the family members cause the accident deliberately. For the time limitation to exercise the right, it is not prescribed in the Insurance Law. The insurer's right of subrogation is the civil compensation right of the insured to the third person, or we call it the right of claim for compensation due to infringement, or the right of claim for compensation due to breaking contact, all limited by the time limitation. Therefore, the insurer's exercising of this right should also obey the limitation. And the exercise must be limited by the time limitation of the insurer's claim for compensation to the third person. As for the orders of being compensated, a great many nations definitely prescribed that the insured's right of obtaining compensation should be protected in priority, that is, before the insured obtaining all the compensation, the insurer cannot exercise their right of subrogation. This is theoretically called the priority of the insured principle. This principle fully embodies the function of insurance compensation, and is a necessary logical conclusion of the right of claim of insurance subrogation. The abandonment of this right contains two situations, that is, before the accident and after the accident. The former embodies the abandonment in the contract between the insurer and the insured, and between the insurer and other insurers. The latter embodies that after the insurer pays the insurance, the insurer does not exercise this right. If those who are responsible for the compensation are financially insufficient, which bothers the compensation, the insurer could abandon this right or partly abandon it. The insurer can also abandon this right for their own credit or for their customers'interests.The fifth part, combining with our country's legislative and judicatory actuality, explores the operating methods of the right of subrogation in present insurance practice. In judicatory practice, the insurer, under the circumstance that without exposing their own identities, interferes the case that the insured indicts the third person, controls the process of litigation. And they worry about that once the insurance company publicizes its identity, and after paying the insured, and latter refuses to cooperate, which makes the prosecution difficult. Our Insurance Law prescribes that only if the insurer pays the compensation, thus obtain the right to claim for compensation from the third person, which does not need to confirm. But in practical cases, the insurer often asks the insured to draw on compensation receipt and letter of subrogation. In claim of subrogation, the court often censors the range of the insurance contract and the third person's demurrer. If the contract is not tenable, is invalid or repealed, there is no legal basis for the compensation, then the right of subrogation will not be tenable, and the insurer cannot exercise the right of subrogation.