On The Insurer’s Right Of Recovery In Motor Vehicles’Compulsory Insurance Against Traffic Accidents

The recent years saw an upsurge in the number of motor vehicles in China, which hasgreatly pushed up the occurrence of traffic accidents. The loss of lives, injuries and lossescaused by such accidents constitute a heavy burden on both families and individuals.Before Motor Vehicles· Compulsory Insurance against Traffic Accidents was introduced,compensation to the victim was made mainly through The Third-Party CommercialInsurance. Commercial insurance companies run for profits and therefore normally wouldnot compensate for traffic accidents caused by the insured·s malice, thus the mechanismfor protecting the interests of the victim was imperfect. With a view to protecting thevictim·s interests to the largest extent, The Regulation on Motor Vehicles· CompulsoryInsurance against Traffic Accidents (hereinafter referred to as the Regulation) came intoeffect in2006. Due to the ambiguity of Article22of the Regulation, different local courtshave been interpreting and applying the article in different ways, and consequentlydifferent rulings were made on similar cases. The major points of contention amongscholars and in judicial practice are whether the insurer·s obligation is to merely advancethe fees arising from the emergency treatment given to the victim in the insured·s place orto accept the insurer·s compensating liability and whether the phrase damage to propertyμin the article should be interpreted in a broader sense or otherwise. If the court rules that the insurer should pay for the losses, is the insurer entitled to the right of recovery inaccordance with Article22of the Regulation? Through interpretation of Article22of theRegulation, this essay holds that the insurer·s obligation is to compensate for the loss oflife or injuries caused to the victim and not merely to advance the fees incurred by theemergency treatment of the victim, and that after making the compensatory payment, theinsurer is entitled to subrogation on the insured. The legal circumstances for which theinsurer is entitled to the right of recovery should be expanded to include the followingones where malice is involved:ⅰ)traffic accidents are caused by driving onstate-controlled psychotropic drugs or narcotics; ⅱ)the insured engages in criminalactivities or evades legal arrests;ⅲ) the vehicle can be found after a hit-and-run accident.As to the circumstance where an insured motor vehicle causes a traffic accident after it islost to robbery or theft, the losses incurred thereby should be covered by the socialassistance fund for road accidents.