Increased Risk Of China's Insurance Law, The Obligation To Notify

The main purpose of the insurance contract is that insurers collect premiums, as well as the risk that should have been wholly borne by the insured is dispersed by the common groups in order to achieve the transfer of risk when the insurance disaster resullts in the damage of the insured person. The risk of the subject matter insured is always in a dynamic process, but there will be a big difference in the conclusion of insurance contracts on the expected risk and the actual performance of the contract. The insurance contract is a continuing contract, if the danger is serious beyond the extent of insurance in the insurance contract, it is bound to improve the probability of insured events, thereby increases the insurer's obligations and destroys the original price balance. Therefore, the Insurance Act regualtes the informative obligation of risk increases. As is shown in the provisions of Article52of the new Insurance Law in China:"If the degree of risk to the subject matter of insurance increases appreciably during the term of the contract,the insured shall notify the insurer in accordance with the contract in a timely manner and the insurer may, in accordance with the contract,increase the insurance premium or terminate the contract. If the insurer terminates the contract,it shall refund to the proposer the insurance premium collected,minus,in accordance with the contract,the portion to the which it is entitled for the period between the date of commencemnet of its insurance liabiliyt until the date of terminaiton of the contract.If the insured fails to perform its notification obligation as provided in the preceding paragraph and an insured event occurs due to the appreciable increase in the gegree of risk to the subject mattef of insurance, the insurer shall not be liable to pay indemnities." when changes in the insurance the subject matter has a serious increase, the provisions in the Insurance Law regulate the informative obligation of risk increases of relative person. and therfore insurers have the opportunity to make a correct assessment of the factual circumstances of increased risk and re-decide whether to continue to underwrite or to continue underwriting in the conditions, to take appropriate measures to control risk. Insurance laws in many countries regulate the informative obligation of risk increases as a legal obligation to be provided, but its specific contents are different. However, the informative obligation of risk increases of the Insurance Law in China is described too simple, and inevitably causes some problems in practical operation. For example:the degree of increased risk is different, the severity criteria and the elements is unknown; the scope of this notification obligation should be limited to property insurance or not; the reasons for increased risk can sometimes be attributable to the parties, and sometimes are not attributable to the parties, which is not differed for the same legal consequences appropriateness; when the informative obligation may be exempted and so on. This article discusses the specific applicable circumstances of the informative obligation of risk increases in the Insurance Act,, and defines the nature of the informative obligations of the increased risk, the theoretical basis, the application scope, the elements, the informative obligations exemptation, legal consequences and other problems, and conduct a more in-depth discussion on the application of informative obligation of risk increases in the new insurance law.