Non-defense Research Of Insurance Contracts

In economic life, people are generally risk-averse. They want to transfer their own risk by some way. Insurance will fulfill such need in that the insured can transfer their risk to the insurer by paying the premium and be reimbursed when accident happens by the pool of fund created by the premium they paid. As rational person will chose what is the best for them, the insured tends to conceal certain facts to the disadvantage of the insurer, this is known as asymmetric information. But the insurer often takes this as an excuse to disregard the contract when the insured claims compensation. Such actions of the two parties will result in higher premium which will harm those who are seeking long-term protection from insurance.With the development of insurance, the power of the insurer becomes greater relative to that of the insured. This unbalance hinders the further development of insurance and therefore helps the "incontestable provision" to blossom, the aim of which is to rebalance the power of the two parties.Nowadays, incontestable provisions have become quite common in mature markets, and in depth study on these provisions have flourished. The value of these provisions becomes self-evident as incontestable provisions have been adopted by more and more countries.In the meantime it is also a good proof of a growing and advancing insurance market. In the aim of a better insurance market in China, the authority has formally introduced the incontestable provision into insurance law in 2009. However, since the insurance market in China is relatively young compared to other mature markets, there are still defects in these provisions. For the purpose of better legislation in China’s insurance law and healthier growth of the insurance market, this paper compares the differences between incontestable provisions in China and other countries, analyses the drawbacks in these provisions in China and at the same time proposes some remedies accordingly by borrowing ideas from advanced legislation in western countries.On the basis of extensive reading of the historical development of the terms of the non-defense and foreign-related legal documents, the paper uses the comparative method to analyze the non-defense provisions of countries such as US and Japan. Then make recommendations to the deficiencies of non-defense provisions. The article is divided into six parts.The first part introduces the non-defense provisions of the research background and purposes, and has a brief description of the terms of non-defense at home and abroad.The second part discusses the term of non-defense provisions and theoretical basis. To avoid confusion in the definition, the article makes a distinction between the non-defense provisions and waiver. In the part of theoretical basis, the paper describes from economics and law. In the part of economic, it analyzes from the asymmetric information and adverse selection. In addition, it analyzes the part of law from the principle of good faith and the value of security and order.The third part introduces the non-defense provisions of the foreign countries, and has a brief overview of the characteristics.Part IV discusses the application of the incontestable provisions. In the applicable conditions, the paper analyzes from negligence of inform, the defense period and the survival status of the insured. For the negligence of inform, it elaborates from the subjective and objective aspects. In the part of applicable exception, it introduces four exceptions, and has a special presentation on insurance fraud exception.Part V describes the development and significance of non-defense provisions in China. It divides into three stages to describe the course of development. In the part of the significance, it analyzes from these aspects such as the substantive law, procedural law, social and technical perspectives.Finally, the paper analyzes non-defense provisions of the current situation and suggestions for improvement. Firstly, it elaborates on the scope of application of the incontestable provisions in China’s Insurance Law, then describes the defects, and make recommendations accordingly by borrowing ideas from advanced legislation in western countries.