Formation And Validity Of Insurance Contract

In practice, the indetermination of theory of formation and validity of insurance contract always makes insurance industry and law obsess. The reason why I take formation and validity of insurance contract as my subject is that settle the dissension in practice aroused by the indetermination of formation and validity of insurance contract; and perfect the codices of insurance contact in China through opening some problems of Insurance law of the People's Republic of China out and bringing forward some my opinion.In my paper, I have used methods of comparative jurisprudence, empirical research, legal interpretation, based on the theory of insurance law, compared with the law of continental law system and common law system, taken prevalent international insurance convention as references, in order to expound the theory of formation and validity of insurance contract. My paper discourses upon some questions which easily arose dissension in practice as emphases.Firstly, the legal station of the insured. The insured is not the policy holder, which has not right of hold, use, income, disposition of policy, so that's means the insured is not the party of insurance contract. In property insurance contract, the insured is a person who is protected by the property insurance contract and who enjoys the right to insurance claims. However, in life insurance contract, the situation is totally different. A beneficiary is a person who enjoys the right to insurance claims. The insured just becomes insurance object without the right of agreement for the insurance contract, insurance claims, designating a beneficiary, except the right of approval of being a insurance object and choice of beneficiary. However, the legal station between insurant and the insured have been mixed up in Insurance law of the People's Republic of China.Secondly, the manner of agreement made by insurant and the insurer. In practice, there is dissension on when and how the insurer makes acceptance. The insurer often refuses to undertake the responsibility to pay indemnity with a reason that is he haven't made acceptance so that the insurance contract haven't formed. In order to balance the right and interest between the insurant and the insurer, the insurer should undertake the responsibility of acceptance by law through using the legal model of America, Korea and Macao for reference, because the insurance contract is adhesion contract. If so, the amphibolous clause-"the insurer shall issue insurance policies or other insurance certificates to the insurant in a timely manner"can be made certain. Thirdly, the argument of whether the insurance contract is informal or not. The insurance contract shall be informal, as the trend of legislation around the word and the interest of insurant or the insured should be taken account. Somebody though the insurance contract shall be formal because he considers the formal contract is equal to the written contract. In fact, the content of insurance contract can be put up thought insurance certifications, so that the insurant can take the onus probandi easily. However, the article 13 of Insurance law of the People's Republic of China has conflict, because the fist clause takes insurance contract as informal contract, the second clause is reverse. Fourthly, the relations between insurance premium paid and the formation of insurance contract. Paying insurance premiums is a responsibility undertaken by insurant, not the reason of formation of contract. When insurant have paid insurance premiums and the insurer have accepted, the insurance contract should be considered it has been formed. However, the insurance premiums and the fee equal to the first insurance premiums are totally different. The latter is accepted as custodial form, so that it doesn't mean the insurance contract is formed. When insured risks occur before the formation of contract, the insurer should take the responsibility to pay indemnity, using international convention as references. In Insurance law of the People's Republic of China, there are no articles regulating the situation when insurant pays insurance premiums or the fee equal to the first insurance premiums ahead of the formation of insurance contract.Fifthly, legal station of the insurance agents. The power of agents is given by the insurer according to the agent contract. The definition of power of personal agents always makes dissension in practice. In general speaking, personal agents don't have the right of agreement with insurant, accepting representations made by insurant and insurance premiums. Without three rights mentioned above, personal agents are not real agents in civil law. However, the power of agents should be clear and known by insurant, if not, it can't confront well-meaning person. That means the insurer should perfect the regulation of insurance agents.Sixthly, how the responsibility of representations makes the effect to the validity of insurance contract. Insurant have the responsibility to make true representations to the insurer about the facts of insurance object. Representations are unilateralism made by insurant, which means that it's not the reason of formation of insurance contract. However, if insurance conceals facts deliberately and refuses to perform the obligations of making true representations of fails to perform the obligations of making representations due to negligence that would be enough to affect the insurance from making the decision of whether or not to agree to accept the insurance o raise the insurance premium, the insurer has the right to terminate the insurance contract. Before terminating the insurance contract, the contract is valid.Seventhly, make approvalism and familism establish in life insurance contract. Taking the approvalism as legal model can make the insurer have eminent domain to his life, and the familism applies to the situation when the insurer is a person having no capacity for civil conduct. However, interestism, approvalism and familism have been taken by life insurance contract in Insurance law of the People's Republic of China so as to arose conflict in legislation and dissension in law.Eighthly, make retroactive insurance establish in insurance contract. Retroactive insurance means that the period of insurance responsibility taken by the insurer can be advanced to some time before the formation of insurance contract. If make retroactive insurance establish in insurance contract in legislations, it can help solve the situation when insurance risks occur before the formation of insurance contract. However, there are no legislations related to the insurance responsibility taken by the insurer when insurance risks occur before the formation of insurance contract.All problems mentioned above, can be solved with the legislation procedure of Insurance law of the People's Republic of China. If there is vacancy, some articles can be added. For example, add the article about the insurer's responsibility of acceptance, retroactive insurance, the premium paid before the formation of insurance contract. If there is conflict, just remove it. For example, define the insurance contract as informal contract, make approvalism and familism establish in life insurance contract. If there is some wrong with articles, for example, the legal station of the insured, they can be amended. I believe that the theory of formation and validity of insurance contract should be made clear in legislation, if so, the disputes can be avoided or reduced.