Prior Abandonment Of Compensation Right And Insurance Subrogation

Insurance subrogation, as the embodiment of damage compensation principle in insurance law, plays an important part in the world. In China, the regulations of insurance subrogation in Insurance Law are so simple that many subrogation problems in the insurance and legal practice can’t be settled fairly and effectively. After the insurance accident, the insurer gains insured’s compensation right to the third person who causes the accident after the insurer pays insurance benefit to the insured. The right that the insurer gains in this process is called insurance subrogation. Along with the development of insurance industry, the phenomenon that more and more insured gives up compensation right to impede the performance of insurer’s subrogation appears. At this point, how to maintain the interests of the insurer and how to balance the interests of the insurer, the insured and the third person are problems to be solved. There is only article61of Insurance Law providing methods that the insurer no longer has the ability to give insurance benefit when the insured gives up damage claim after the insurance accident. When the insured gives up compensation right before the insurance accident, whether the insurer can perform insurance subrogation and pay insurance benefit to the insured, there is no law statement in our country. When courts face problems like this, different courts give various verdicts for the similar and almost same cases.For the problem that how the insurer performs insurance subrogation when the insured gives up compensation right before the insurance accident, on the basis of judging the effectiveness of abstention, this paper discusses scholars’views, takes examples by foreign countries, summarizes methods, cites curt judgments of China, gives analysis of the judgments and offers suggestions to this problem in China’s judicial practice and legislation. Besides the preface and the epilogue, this paper is divided into four parts.The first part discusses concepts of prior abandonment of compensation right, notions of insurance subrogation, and the judgment of exception clauses’effectiveness. After clarifying the related concepts, this paper points out that the effective exception clauses will lead to prior abandonment of compensation right and it can affect the exercise of insurance subrogation. The judgment of exception clauses’effectiveness is the basic of solving the problems of insurance subrogation mentioned above.The second part introduces existing theories of relationship between the abandonment of compensation right and insurance subrogation. It mainly covers the theory of damage to expectations right, the theory of damage guard obligation and the theory of duty to inform or increase of risk. The writer evaluates and analyses the rationality of these theories when introducing them.The third part draws lessons from judicial practices of other countries and districts. By referencing judicial precedent of the United States, court judgment of Japan and Taiwan district, the writer summarizes solutions of the influences between the abandonment of damage claim and insurance subrogation. Courts of United States claims that the insurer doesn’t have insurance subrogation when the insured gives up compensation right and rules of duty to inform are used in cases that the right is given up before the establishment of contract; for the same problem, there are different views between the Supreme Court and the district court; Taiwan district court believes that the insurer can’t perform insurance subrogation when he knows the existing of exception clauses.The fourth part describes the current situation of the judicial practice in China and puts forward some suggestions for China’s legislation and judicial practice. By the discussion of courts’judgment of our country, this paper points out the wide differences between various courts’judgments. The writer presents suggestions which include the utilization of the duty to inform before the establishment of contract, the use of notification obligation after the establishment of contract and the insurer can’t avoid the obligation of giving insurance benefit when the abandonment belonging to business practices to regulate judicial practice. Besides judicial suggestions, the writer proposes the idea that adding clause of subrogation in Insurance Law, to promote the perfection of insurance subrogation system.