The Legislation Of Risk Allocation Of Life Insurance During Underwriting Period In China

In life insurance practice, concluding insurance contract takes a long time, from insurer received application and the first premium, to complete underwriting,make commitment and issue insurance, this period of deposit time is called the underwriting period. It is already a long time for insurance operating as the practice during underwriting period. If accident happened in the underwriting period, the dominant insurer tend to excuse himself by format clause which claiming that the underwriting has not finished and the insurance contract is not effective, and the insurer does not need to bear any liability of compensation. On the contrary, the insurer enjoys the benefits of receiving the first premium at the same time without paying any consideration which damaging the insured interests seriously. However, there is no definite legislation exists to regulate the underwriting process, or clear regulation to identify the nature of the first premium either, which will cause disputes between the insurer and the insured during the underwriting period easily. At the same time, the establishment of an insurance contract is based on the agreement between the insurer and the insured.As an acceptance contract, the insured paying the first premium, the insurer issuing the insurance policy or other insurance certificates are not of established condition for the insurance contract. Both parties to an insurance contract should be borne the jointly risk in the underwriting period, neither the underwriter underwriting rights be deprive compulsory, nor the insured could not get any compensation after the insurance premium has been paid. Therefore, based on the theory of interests balance and trust interests, this article tries to propose three legislation suggestions:(1) establish the system of retrospective insurance;(2) establish the binder system in life insurance;(3) establish compulsory insurance system, thus really security the interests for both insurer and insured,coordinating the rights and obligation for both parties respectively, as well as reducing the disputes effectively during the underwriting period, and adversely it will promote the development of life insurance business healthy in China.