Legal Consider On Observation Period Clause In Insurance

The observation period clause is a critical clause in a health insurance contract,which is vital important both to the insurer and the insured. However, the observationperiod is also a double-edged sword. If it is properly applied, it have very proactiveeffects, including preventing the moral risks, balancing all parties’ interests andensuring the fair transactions. If it is wrongly applied, it will detriment the interestsof the insured and even threaten the healthy development of the entire insurancemarket. Therefore, we explore the observation period clause in a depth by applyingvarious methods, like the comparison method, the science of constitutioninterpretation and the method of economic analysis. This article discusses the purposeof the observation clause and related laws and regulations. It also points out thedeficiency of the observation clause and provides the suggestions to improve it.The first chapter is to explore the theory of the observation period clause forinsurance. In this chapter, the writer discusses the concept, nature, categories,applicable insurances and purposes which provide the theoretical foundation.The second chapter is to explore the legal foundation of the observation period. Itestablishes the legal foundation by detailed analyzing the legal theory of theobservation period clause, the laws reflected by the observation period clause andrelated legal system related to the observation period clause.The third chapter analyzes the judicial practice under the continental law systemand common law system by adopting the comparison method and empirical analysismethod. The fourth chapter is to provide suggestions on how to improve the observationclause by combining the real practice from legislative, judicial and contractualperspectives.