The Study On The System Of The Invalidity Of The Insurance Contract

Many theory study usually mixture the concept of the “invalid insurancecontract”and the “insurance contract invalidity”. The former means a type of theinsurance contract, which results to the invalidity of the insurance contract directly.The latter means a situation of the validity of the insurance contract, this invalidity isterminal. The revocable situation and the pending validity may induce the invalidityof the invalidity of the insurance contract. The invalid insurance contract can inducethe invalidity of the insurance contract，the former is the causality of the latter,but notcorrespondent.Now that all the invalid insurance contract, the revocable insurancecontract and validity pending insurance contract could induce the invalidity of theinsurance contract, we can call these three types “inducement type”, which isimportant for both theory and practice. Studying the inducement type can help us havea better understanding of the insurance law system and the reasons causing theinvalidity of the insurance contract.The law lists the reasons causing the invalidity of the insurance contract, some isformulated in the contract law, the insurance contract law supplements, which iscalled the general reason. Some is formulated in the insurance contract law aiming tothe insurance industry, which is called special reason. The invalidity of the insurancecontract results to the contracting fault liability like return of property, compensationfor damages, recovery of property not breach of the contract. The liability abides bythe fault principle depending the subjective conditions.The invalidity of insurance contract influence the parties directly and seriously. It isconcerned with the achievement of the purpose of the contract concluded by theparties and the fairness and the standardization of the judicial decision whether thesystem of the invalidity of the insurance contract is sound. However the system of theinvalidity of the insurance contract of China is not perfect from theory and practice.First, the insurance contract law does not formulate the he revocable insurance contract and validity pending insurance contract, the value of the both types can notbe realized. Second, the insurance contract law does not distinguish the malicious andthe goodwill when formulating the reinsurance, which can not reflexes the principleof the fairness of the civil law and even encourages the action of reinsurance. Third,itexists many unreasonable aspects when the insurance contract law formulates theinvalidity of the insurance contract like limiting the subject of the insurable interestsas insured in life insurance can not avoid the moral hazard, because only the benefitercan take actions against morality, the validity period of the life insurance shall not belimited to the conclusion of the insurance contract, the property insurance does notinclude the system of benefiter, which is not enough to deal with the situations likethe mortgage insurance and the guarantee insurance.We can make the insurance law better as follows. First, formulate that the insurercan not revoke the contract under the conditions that the insured do not perform theliability of telling the truth, avoiding the overhead of the incontestable clause in theinsurance law, at the meanwhile make the invalidity insurance contract be revocableinsurance contract. Second, distinguish the malicious and the goodwill whenformulating the reinsurance, make the malicious party burden more liability, realizingthe purpose of distracting risk. Third, distinguish the insured and the benefiter, thesubject of the life insurable interests shall be limited as the benefiter, the validityperiod of the life insurance shall be extended to the happen of the risks to protect theinterests of the insured better,the subject of the property insurable interests shall belimited as the benefiter if a independent benefiter exists. It is necessary to find theweakness of the insurance industry, face the situation and correct errors to help theinsurance industry develop better and prosperously.