Research On Insurer's Legislative Rights Of Rescission

Insurer's legislative rights of rescission means the insurer has rights to unilaterally terminate the contract after the establishment of the insurance contract and prior to fully performed of the contract, when the case of a legal requirement appers. The system is designed primarily to achieve fair value and the order value. The principle of utmost good faith and doctrine of balanced consideration are legal resources of insurer's statutory rights of cancellation. The principle of utmost good faith requires that the insured be honest and trustworthy in the establishment and performance of insurance contracts.The doctrine of balanced consideration requires policy holder sincerity and reliability in the course of concluding and performing insurance contract, while the doctrine of balanced consideration demands consideration between insurance premium paid by policy holder and the danger undertaken by insurer. If the applicant does not faith or failed to perform contractual obligations, the insurer may exercise their rights to terminate the contract. However, in practice, the insurer with strong economic strength and technological superiority use its dominant position to draw up standard contract. Most of the insured parties do not have the expertise and often overlook details of contract, which makes insurer abuse rights of rescission to avoid insured liability. In order to balance the benefits of both parties, It would be necessary to indue the insurer relevant with rights of rescission, at the meanwhile, put the abusing of rights under rigid regulations. To achieve that, regulations concerning rights of rescission, forms, circumstances, obstructions and legislative consequences should be taken into consideration.The newly amended insurance law in China makes a great process in some stipulations of statutory dissolution, such as making clear means of policy holder's obligation to disclose, items concerning obstruction of statutory dissolution have been added, legislative standards of insurance contracts caused by risk level of subject-matter insured. However, some shortcomings in obligation to disclose, the obligation of the insurer of the risk increasing, obligation of maintaining security, introducing assurance system and other rules makes it a long way to go to the achievement of perfection.