| The duty of notification of risk increase is an important system in insurance law. It means that the policyholder or the insured should notify the insurer the change of the level of risk, as soon as possible, when an increase of risk was happened, so that the insurer could take corresponding measures to control insurance risk. The obligation is set for the needs of normal operation of the insurance industry. Meanwhile the characteristics of the insurance contract calls for the well performance of this duty. It is an untrue obligation, one can't request coercive measures when the obligor can't meet the performance. It's also an one-sided mandatory statutes, agreements deviating to the detriment of policyholder shall not be permitted.Risk increase refers to the significantly change of risk level, which is not taken into account during the contract concluding, continuing performing the original contract would be rather unfair to the insurer. The increased risk must be material, sustained for a long period in the course of the contract, and not be evaluated when the contact is concluded. "Rational insured standard" should be applied to the judgments of significantly change of risk level. In addition, there must be distinctions between the legal effect of subjective and objective increased risk, so that the insured party could act in good faith to maintain the insurance risk profile.The obligator of this duty concludes both the applicant and the insured. They must notify the risk increase to the insurer without undue delay as soon as he has learned thereof. In the situation of risk increase, the insurer could raise the insurance premium, make exception provisions, cancel or terminate the contract to relieve his interests. When an accident occurred, we should combine the principles of non-causality, causality and proportionality to determine the liability of the insurer, seeking a compromise between the protection of the insurer and the insured party.
|
PDF Full Text Request