A Research On Legal Termination Right Of Insurance Contract

Insurance is the mutual obligatory common group entitled to independent legal right of claim and composed by people who are threatened by similar risks in order to meet the compensation needs of the members for their damages. It possesses several characteristics: first, the insured risks should be unpredictable accidents or force majeure, and the dangerous occurrence must be within the bounds of possibility, but have not yet occurred by the time; second, the underwriting of insurance should have identity; third, there must be the need for compensation, either for the specific compensation or for the abstract compensation; finally, the assuming of the risks for such insurance should be non-gratuitous. The property of insurance determines that insurance contract is bilateral contract, onerous contract, sucessive contract, connexio contract, informal contract and aleatory contract. The connection of multiple insurance contracts will ultimately achieve the goal of having a variety of personal risk, property risk, and the losses as a result of the danger arising from others'liability faced in personal life allocated to and digested into the common group.The insurance law endows both parties with the legal termination right, and this legislative provision itself is subject to strictly limit the arbitrary elimination of insurance contract, to insure a contract of utmost good faith to perform its risk-sharing, loss-compensating function other than in exceptional circumstances; at the same time, to grant both parties with the freedom of getting rid of special circumstances. But the allocation of specific rights and obligations is not in conformity with the goal. Hereto, the author makes some relevant recommendations on the problems in the field of legal termination right of insurance contract at the operational level of the legal termination right, from the perspective of information asymmetry, the classification of obligations of the parties, the public welfare of insurance, and proposes some relevant suggestions.This thesis is divided into three parts as the following:Part-1 The theoretical basis of legal termination right in insurance contract. This part mainly makes clear the basic problems in the theories of legal termination right of insurance contract. The property of insurance determines the property of insurance contract. Compared with the contracts of other types, insurance contract has several characteristics as follows: firstly, the consideration of insurance contract is not realistic. After paying the premium within the scope of their own obligations, policy holders will get the inside security by believing that their risks can be relived, and they will depend only on the insurance contract between both parties on the basis of the principle of honesty and credibility, and the freedom of contract. Secondly, there isn't any information sharing mechanism between the policy holders, or effective supervision mechanism for the operation of insurer. The members of the common group can only trust in the insurer. As the payer of insurance premium for the regular operation of the insurer, if knowing nothing about the internal operating mechanism and structure of the insurance company, the policy holder can only calculate on the faithfulness of the insurer to the commitment. Thirdly, the contract grants the parties with a sort of expectation and trust. It is believed that the contract will restraint both the parties until the final signing of the contract, so there exists the Offer and Commitment. The policy holder of the insurance contract believes to obtain the insurance assistance that is higher than the premiums paid by their own and sufficient to make up for the specific loss or abstract loss being in a disadvantaged situation arising from the risk of accidents. Fourthly, the sharing of the information is playing a more important role in the insurance contract than that in any other types of contracts. Only when the policy holder has provided the accurate personal information and the insured subject matter, and the insurer made a clear explanation about the mastered insurance expertise, can the insurer be insured to work out the reasonable insurance rates, and further collect a premium that is balanceable with the assumed risks. At the same time, policy holder can find out to what extent the risk will be shared. The sharing of all the important information mainly depends on the credit inform of the policy holder and the necessary statement of the insurer.It is precisely because of the above characteristics, the insurance contract makes a higher demand on the degree of the honesty and credibility of both parties than general contracts. At the same time, in order to guarantee the balance of the consideration of insurance contract, the equal rights and obligations between both parties and the equal status between the insurer and policy holder is also the prerequisite and foundation for the realization of the value of insurance contract.Part-2, The legislative actuality of legal termination right in insurance contract. In this part, the author, based on the regulations for the legal termination right of person concerned in our country's Insurance Law established in 2009, has analyzed and revalued the specific contents and form of conditions for legal termination right of a policy holder and legal termination right of a insurer by benefiting from foreign advanced legislative patterns. It is divided into the legislative actuality of legal termination right of a policy holder and the legislative actuality of legal termination right of an insurer. It is quite simple on related contents specified by legal termination right of a policy holder in our country's insurance law, only stipulating the general principles and exceptions of termination right of policy holder, the legal force, etc, have not been ordained during the exercising of termination right. While the regulations of legal termination right of a insurer are more complex, it is summed up by author: breaching the disclosure duty by policy holder, increasing of objective risk of insurance object, falsifying the accident occurred insurance or intentionally creating the accident of insurance, breaching the duty of safety, misstatement of age for exceeding the age limitation, insurance contract terminated through the limit of renewing effect.Part-3, A defect analysis on exercising legal termination right of insurance contractThe defects of the legal termination right of insurance contract mainly include: there is no necessary limitation on arbitrary termination right of policy holder, sometimes, it might cause the damages to interests of insurer, and lacking effectiveness; Comparatively speaking, the limitation on legal termination right of a insurer is overly strict even almost harsh, as would go against the protection of interests of insurer.The author has made an analysis and inspection for above from different perspectives. The three reasons, in terms of insurer's more advantage position than policy holder, have been analyzed in detail by the method of practical angle, it has been concluded that: except the reason of information asymmetry, additional defects of economic power and adhesion of contract have been corrected considerably during the practical operation; From the perspective of information asymmetry, the allocations of legal termination right between person concerned are exactly a corrective method and an exit mechanism to the information asymmetry; Correspondingly,the behavior of breaching information sharing duty has been got a negativity evaluation by the way of given authority of termination right, because it has breached the payment obligation; Reflecting from the perspective of social benefit, the author believes that, based on the strict limitation to legal termination right of a insurer, it should provide the necessary limitation to legal termination right of policy holder, as are both the inevitable demand of equality of person concerned and the inevitable demand of encouraging the development of insurance business, adapting the rising dependence of contemporary market economy on insurance business, the suggestion concerning with improving legislation is put forward by the author accordingly.