A Brief Analysis On The Legal Risks Of Internet Insurance

Chris Anderson mentions in the book The Long Tail that the future of business and culture do not lie in hits-the high-volume end of a traditional demand curve-but in what used to be regarded as misses-the endlessly long tail of that same curve. Leveraging a brand-new operation platform and Internet technology, Internet insurance changes the traditional insurance from offline to online, forming the "tail" which has inexhaustible market potentialities. In 1997, the first information network of Internet insurance company has been founded in China. Moreover, on the first day of its establishment, it gave the first insurance policy to customer through online marketing, which marked that china’s insurance industry has entered into the Internet market.On the document Several Proposals on Accelerating the Development of Modern Insurance Services Industry issued by the State Council in 2014, the government explicitly supported the insurance company to develop its internet insurance business by making use of Internet technology, such as big data, cloud computing, mobile internet and so on, which can offer the insurance industry innovations. This document draws a new blueprint for the future development of Internet Insurance. On the Third Session of the Twelfth National People’s Congress on March 5, 2015, Premier Li Keqiang put forward the “Internet Plus” strategy which indicated that under the new form of economy, the trend that traditional financial industries integrate with Internet is inevitable. However, as an important member in the financial industry, insurance 2industry should give full play to Internet’s optimization and integration function which promote the combination between the innovative product of Internet and insurance industry, improve innovative capability, break the former rigid market pattern, as well as achieve new potentialities in insurance industry. As the representatives of the new generation of information technology, mobile internet, cloud computing, big data and the Internet of Things will integrate with industry insurance, make innovations and therefore create new value-added insurance market, which can bring new blood into the whole insurance industry.On July 22, 2015, the China Insurance Regulatory Commission issued the Interim Provisions on Insurance Business on the Internet(hereinafter referred to as "Interim Provision") specified to supervise insurance business on the Internet, filling in gaps in china’s current law of insurance supervision on the Internet. Although the Internet insurance is flourishing and welcomed by the society, we should clearly understand that the Internet insurance itself is still insurance and it doesn’t change its fundamental attribute. Moreover, it not only possesses the risks of inherent insurance industry, for example, moral hazard and adverse selection, but also regenerates some specific risks from Internet insurance itself, such as the effectiveness of electronic policy on the Internet, the problem of subject legal relation, hints and clarification of exceptions clause and so on. In order to prevent all kinds of new risks, our country has promptly released the “Interim Provision”, but in practice there still existed many legal regulation problems of Internet insurance.With the development of the Internet insurance, it’s essential to prevent legal risks of Internet Insurance. Aimed at the specific business situation of today’s Internet insurance, this thesis explores the legal risks of Internet insurance in an all-round and thorough study so as to find out the existing problem and then analyzes its causes. Through the analysis and reasonable argumentation, this thesis puts forward feasible solutions to problems and wants to provide theoretic support and practice pattern to the healthy development of china’s Internet insurance.The thesis is divided into four chapters and the main contents are as follow:Except for the introduction and conclusion, the body includes four chapters.The first chapter is the overview of the Internet insurance. The thesis illustrates it in three aspects: the concept and main types of the Internet insurance, the introduction of its development in China as well as its legal nature. First, the thesis introduces the concept of Internet insurance and the main types of that in China. Then the thesis analyzes the development opportunities of china’s Internet insurance and the background of its development. Last, the thesis analyzes the legal nature of Internet insurance which paves the way to the latter analysis on the risks of Internet insurance.The second chapter discusses about the legal risks of Internet insurance caused by problems related to the Internet insurance contract. This part contains the problem of identifying the contract’s applicants, the obligation to prompt and illustrate the exceptions clause in insurance contract, and the legal risks caused by the lack of insurable interests. What’s more, this part summarizes the possible legal risks in Internet insurance contract, and then analyzes each risk in order to find out methods to avoid that.The third chapter introduces legal risks in Internet insurance website as the third party. First, it analyzes the legal risks in commission contract. Then, it analyzes the legal risks through the third party payment.The fourth chapter introduces some legal risks under the consumer protection in Internet insurance, including the aspects of the right of privacy, the right to know and the right of claim. Analyzing those risks and putting forward supervisory suggestions will contribute to the healthy development of Internet insurance.