Research On Insurable Interest In Life Insurance Contract

From the study of the development of insurable interest, the author discusses the functions of the insurable interest principle which applies to life insurance, analyzes the necessity of the existence of insurable interest principle in life insurance contract, and comparatively analyzes the guidelines and specific provisions of the legislation on the insurable interest principle in life insurance contract in the world. And then based on the compatible interest and agreement principle, the author insists that the legal provisions should be flexible and give full play to the function of guarding against moral hazard, but also from the perspective of the autonomy of private law with full respect for the insurant's free will. Finally, aiming at the defects of insurance legislation, the author puts forward related legal suggestions.There are five parts in the paper as follows:The first part is basic theory of insurable interest. This section first reviews the emergence and development of insurable interest and then expounds the importance of insurable interest to insurance system. Secondly, based on the study of economic interest theory, advantages and disadvantages relations theory and legitimacy interest theory, the author supports legitimacy interest theory. So as a legal definition, insurable interest will give full play to its effectiveness, and promote the practice of insurance law. Thirdly, three elements of insurable interest are introduced. Finally, the functions of insurable interest are further demonstrated: eliminating gambling, preventing moral hazard and restricting damage compensation.The second part is insurable interest in life insurance contract. This section first discusses the meaning of insurable interest in life contract. According to legitimacy interest theory, insurable interest in life contract means that when the policy-holder makes an insurance contract for the bodies or lives of others, the policy-holder should own legitimacy advantages and disadvantages relations. Secondly, based on the analysis of the definition, the author summarizes the uniqueness of life insurable interest compared to property insurable interest in evaluation, the purpose and the point of existence. Finally, the author discusses the controversy of the application of life insurable interest. Based on the analysis of the theories of the Anglo-American Law system and the Continental Law system, the agreement principle which is adopted by the Continental Law system can not give full play to guarding against gambling and moral hazard, and at the same time there are no substantial contradictions between the claim and life insurable interest. Therefore, insurable interest should be firmly applied to life insurance contract.The third part is the cognizance principle of insurable interest in life contract. This section expounds the interest principle of the Anglo-American Law system and the agreement principle of the Continental Law system. Through comparative analysis, the interest principle carries out the purposes of compensation for a loss, but it ignores the emotional connection between people; the agreement principle more respects the insurant's free will, avoids the analysis of complex human relationships, simplifies the work and improves the efficiency, but it is not conducive to the prevention of moral hazard. Thus the author insists that the compatible interest and agreement principle should be adopted. And considering objective interests, the author thinks that it is more reasonable to prevent moral hazard with respect of the insurant's free will. The fourth part is the definite regulations of the insurable interest principle in life insurance contract. Firstly, this section studies the argument at home and abroad that the main body of life insurable interest is the policy-holder or the beneficiary. In view of the insurant and the beneficiary of life insurance as the main beneficiary in the contract, the author insists that not only the policy-holder but also the beneficiary is the main body of life insurable interest. In this way, it is highly advantageous to eliminate gambling, prevent moral hazard, and safeguard social good morals.Secondly, through the analysis of national insurance legislations, the author thinks that the relationships of insurable interest includes oneself, spouse, parents and children, other family relationships, the creditor and the debtor, partners, employers and employees and so on. Finally, in the aspect of the time point of existence, when they conclude the life insurance contract, the insurant and the beneficiary should be required to own insurable interest. And when the life insurance contract has been concluded, that if the beneficiary needs insurable interest depends on the types of contract. When the insurance accident happens, the beneficiary in compensatory loss contract should own insurable interest which is not necessary for the beneficiary in the fixed payment contract.The fifth part is the suggestions that how to perfect the rules on the insurable interest principle of the insurance law in China. This section analyzes the current situation of China's insurance legislation and existing problems which should be summarized as follows: firstly, the definition of insurable interest is not clear; secondly, some of the main body of insurable interest is lost; thirdly, the interest principle and the agreement principle are in confusion; fourthly, the time point of existence of insurable interest is too strict; fifthly, the insurer is in lack of review obligation. In view of the above deficiencies, the author puts forward legislative proposals to perfect the system of insurable interest. Firstly, the definition of life insurable interest needs to be perfect. The definition could be modified as follows: the people who own legitimacy advantages and disadvantages relations to insurance subject are considered to own insurable interest. Secondly, the main body of life insurable interest needs to be added. Particularly in life insurance contract in which others'lives and bodies are become insurance subject, the main body should be the policy-holder and the beneficiary in order to eliminate gambling and prevent moral hazard. Thirdly, the scope of insurable interest is to be expanded. The relationships of economic interests should be added. For example, the policy-holder could own insurable interest of their debtors, partners and so on. Simultaneously, the contract that has been concluded by the policy-holder who owns insurable interest would entry into force when the insurant agreed. Fourthly, the time point of existence of the insurable interest should be changed. When they conclude the life insurable contract, the beneficiary in the fixed payment contract should be required to own insurable interest and when the insurance accident happens, it is not necessary for the beneficiary to own insurable interest. It is good for the liquidity and the investment in insurance contract and it will balance the benefits between the policy-holder and the insurer. Fifthly, the insurer's review obligation should be formulated. If the insurer does not fulfill his obligation, he can not claim the contract null and void due to lack of insurable interest. And if it causes the injury of the insurant, the insurer should bear liability for tort. Sixthly, restrictions on the death insurance should be made to perfect the law and protect the restrict person of civil action competence.