On The Double Insurance

The system of double insurance, as the derivative of the indemnity principle, plays an important role in the enforcement of the indemnity principle and can effectively prevent the moral risk arising from the action of the insured who concludes contracts with several insurers. However, the provisions of double insurance in the Insurance Law Of PRC and in the Maritime Code Of PRC are too simple to protect the legitimate rights and interests of the bona fide insured and to balance the interests of the insurers. Therefore, it is necessary to improve the relating legislation. Based on the relevant provisions in the Insurance Law Of PRC and in the Maritime Code Of PRC, this article refers to the legal provisions of foreign countries. By making a deep study of the several legal issues on double insurance, the article points out the defects should be reformed and improved in the relevant regulations and puts forward some advice on their amendment.The article can be divided into four parts. The first part discusses the definition and the component parts of double insurance. There are two opinions on the definition of double insurance. The dispute is about whether double insurance should be defined in broad sense or in narrow sense. Referring to the legislative intention of the system of double insurance, the article contends that the definition of broad sense should be adopted. To constitute double insurance of broad sense, the following six conditions must be fulfilled: the same subject-matter, the same insurable interest, the same peril, the same assured, the same safe time limit, and several contracts with different insurers.The second part discusses the scope of application of double insurance. In this part, by summarizing the legal provisions of different countries and the views of scholars, the article sets forth three viewpoints on the principle of scope of application. After analyzing critically the three viewpoints, the article agrees with the principle that maintains double insurance should be applied to the indemnity insurance. In view of the particularity of liability insurance, there are some difficulties in the application of double insurance in liability insurance. The article suggests that law interpretation provides that the relevant provisions of the average property insurance are also applicable to liability insurance should be made to fill the legislative hole.The third part mainly discusses the legal effect of double insurance contracts and the duty of notification. The Insurance Law of PRC lacks clear provisions of the legal effect of double insurance contracts. The article suggests that their effect should bedecided by whether the person assured is out of goodwill or not. In addition, the article makes a detail exposition of the duty of notification including its legislative intention, its time and manner, its contents, and its legal nature. The article also suggests that the provision of legal liability while the duty is violated should be added in the Insurance Code Of PRC.The fourth part analyzes the relationship among the parties of double insurance. In this part, the article first discusses the insured's right of claim and his right of asking for the return of premium. Then, the article expounds the insurer's right of contribution and its enforcement, clarifies the legal nature of the right of recourse. In the end, the article makes an introduction of the rule of contribution and the method of solving conflicts while there are conflicting other clauses in the policies under the common law for reference.In summary, the system of double insurance is very complicated. This article pays attention to the controversial problems about double insurance and points out some defects in the existing law, meant to be followed by the soon improvement of the system.