Research On The System Of Insurance Information Disclosure

Market Economy can also be called Information Economy. In the insurance market, insurance information, closely related with the interests of the insurance institutions and the public, occupies a crucial position. However, insurance market is a typical market which is full of asymmetric information. The insured and the insurer respectively have their own advantages in terms of information; that is, there exists a two-way information asymmetry in between, which will affects the healthy development of insurance industry seriously. Judging from the current situation of the insurance market of our country, disputes over insurance, more often than not, result from the insurer's information opacity rather than the concealment of the insured. Asymmetric information of the insurance market can be more easily felt when it comes to the vulnerable position of the insured. The information disclosure system of our country should set more constraints and norms for the insurer and protect the rights to know of the insured in earnest. Therefore, this paper mainly explores the information disclosure of the insurer based on the analyzed disclosure system fully. Information disclosure can reduce the unilateral information as much as possible in amount, strikes a balance in insurance information between both sides. And then bring down the bad effects caused by asymmetric information. The information disclosure system has been initiated in our country recently and the relevant systems are not perfect, or rather, full of holes. So the author puts forward some corresponding suggestions in accordance with the current situation of our country. They will contribute a lot to the prevention and reduction of the negative effects imposed on the insurance market by information asymmetry.The paper includes preface, main text and conclusion. The main text is divided into four parts.In the first part, it mainly introduces the asymmetric information theory and its harms while discussing the important significance of information disclosure system for insurance business. Fairness and credibility are the values followed by laws all the time, and they are also the eternal themes. Information asymmetry destructs the basics of fairness and credibility in insurance relationships. Hence, laws should focus on fairness and credibility in insurance transactions. As the insurance market, where risks are diversified and transferred, asymmetric information is universal and multitudinous; its harms done to the insurance market can never be ignored. It will cause adverse selections and moral hazard; it will take down the insurance needs and bring a phenomenon which called"thin"in the insurance market; it will lead to all kinds of disputes over insurance, etc. As insurance businesses are full of sociality, the credit crisis of the insurance industry will influence lots of social families and individuals, whose risks can not be assured and the proceeds can never be achieved. Therefore, the credit crisis caused by asymmetric information will not only imperil the survival and development of the insurance market, but also trigger some more serious social problems. In this sense, resolving the problem of information asymmetry is of great weight. And the disclosure of information among the public deserves to be the best choice in eliminating the information asymmetry. It will be difficult for insurance companies to get enough information of insurance subject, or it may cost too much to do that. At the same time, the ordinary social public can not get a full understanding of the insurance companies'backgrounds, operational capacities and so forth. So information disclosure is satisfied with the needs of the insured and the insurer.The second part analyses the insured's legal obligation to disclose information, including the duty of telling truth and notice. The duty of telling truth is a precedent contract and legal obligation, and its fulfillment is the foundation and prerequisite for signing insurance contracts. The aim of telling is taking the insurer to understand insurance subject fully and then decide whether to accept or not as well as the standard of premium rate. In most cases, only the insured knowing everything and the insurer unknown, the insurer are unable to evaluate the risks accurately they should take. Those who violate the duty of telling truth will receive legal responsibility. Notice is another important aspect of information disclosure of the insured. During the period of insurance, there may be some changes for insurance subject; meanwhile, some insurance accidents are likely to take place. In order to get the changing information of insurance subject in time, more often than not, the insurer require that the insured should notify in no time if the risks have increased or there exist some insurance accidents. These regulations aim to correct the information weakness and protect the interests of the insurer.The third part analyses the insurer's legal obligation to disclose information. Based on the strong position of the insurer, this paper introduces this part in detail. The laws and legal experts used to pay more attention to the insured and ignore the insurer, who should disclose their information as the main trading. According to the ultimate credibility principle and the balance of rights and obligations, there is no doubt that the insurer should take corresponding responsibilities equaling to that of the insured. Most of the time, the insurance contracts are too standard-form and professional to be understood by the insured. In these cases, it is necessary for insurance companies to give explanations on the insurance items. Due to the risk protection and the investment of insurance production, the insured need to judge insurance companies'comprehensive capacities such as operational capacities, prospect and so on, when they choose. So it is very necessary to disclose the operational information for insurance companies. There also exists information asymmetry in the process of insurance claims. Obviously, insurance companies have more advantages in terms of staff members, knowledge and technology while the insured as ordinary publics have little room for defense. The specificity of insurance products and insurance management determine that the insurer need disclose their information.The fourth part researches the current state of information disclosure in our insurance market and brings forward suggestions to reform. Our country's information disclosure system is still at an initial stage, and it is far from perfect. It needs to be furthered and improved continually in many aspects, especially on the issue of the insurer's information disclosure. The irregularity and arbitrariness of the insurer's information disclosure make it impossible for the insured to have a detailed and systemic understanding about the insurance information of insurance companies and insurance productions. Hence, the insured's interests are full of uncertainties. Insurance companies usually make the information contributing to their operation and development clear while conceal deliberately those bearing negative effects. We should improve laws and regulations, define legal responsibilities, strengthen supervision, develop evaluation institutions, establish social credit, and achieve the purpose of sharing information. In order to solve the problem of information asymmetry in insurance market, the insured, the insurer, insurance regulators and insurance intermediaries should play their active roles respectively, to ensure the insurance market developing prosperously.