Interpretation Of Exemption Clause In Insurance Contract

The problems existed in exemption clause in insurance contract are significantly and directly influencing the insurance judicial trail. Currently, in terms of legislation and judicature, there are problems on undefined coverage and uncertain judgment thinking in terms of exemption clause. Due to the undefined coverage of exemption clause, the judge has his own understanding toward subject matter. It is hard to show the substantial justice of exemption law if simply judge exemption clause to be invalid basing on the fact that insurer fails to complete his responsibility of noticing in juridical practice.This paper set out from the analysis on exclusion of insurer, analyzing the technical issue of how an insurer is excluded. The paper firstly proposes problems existed in exemption clause, while the second and third part preliminarily defines the range of exemption by a context analysis on exemption clause and relevant law representation and an illustration on the relation between insurance coverage and exemption clause.Exemption clause includes, but not limit to, the clause “immunity from liability” in insurance contract. Article 17 of the 2009 revised Insurance Law amended the expression “clause on exemption from liability of insurer” into “clause exempting liability of insurer”, which broadens and transform the concept of exemption clause from narrow to general sense. The clause “exempting liability arising from relevant laws of insurer” is a classic representation of exemption clause. The relation between the coverage of insurance and exemption clause contains not only inclusion relation, but also complex casualty. To judge whether the limitation of an insurance coverage constitute exemption clause, the nature of the insurance contract and consideration and balance principle shall be taken into consideration.The forth part of the paper, in accordance with different standards, divides exemption clause into groups such as statutory exemption clause and conventionalexemption clause; reasoning exemption clause and result exemption clause; substantial exemption clause and procedural exemption clause, based on which, further interpretation is conducted on exemption clause’s structure and legal reasoning with the combination of actual cases. The fifth part discusses exemption clause under two important interpretation principles(unfavorable interpretation principle and legitimate expectation principle)in Insurance Law, and by analyzing the judicial status exemption clause, it illustrates specific control method of exemption clause. Lastly, through an overall review of the paper, it proposes the equal significance between substantive control and procedural control, and comments on certain new attempts in real cases.