Restrictions On The Insurer’s Defense

In recent years, the insurance industry is rapidly developing.It transfers of the risk of the insured, as well as brings a variety of issues. One of the performances is the abuse of the insurer’s defense. It is damaging the rights of the insured hardly. This article will try to find out the limit of the insurer’s defense from the principle of waiver and estoppel, the duty of disclosure, the doubt benefits and the doctrine of reasonable expectation aimed at providing the operational theory basis for regulating the behavior of the insurer and ensuring the benefit of the insured, which based on utmost good faith and the principle of fairness.This paper will first study on the theory of the limits of the insurer’s defense---------utmost good faith, based on the analysis of the necessity limiting the insurer’s defense. Utmost good faith is a kind of faith which is stricter than that of general civil activities during the performance of the contract process. This faith limits the insurer’s defense through legislation criterion function, behavior criterion function and judgment criterion function. Fairness requires companies to formulate fair and reasonable terms, otherwise it shall be invalid. When both sides are disputing about the terms, it chose the explanation which conducive to the insured.In the second part, I will analyze the limits from the system of waiver and estoppel. This system is prevailing in the field of insurance thanks to the protection for the weak insured from limiting abusing of rights. But it is a pity that there is no relevant rule in our country. So I will analyse it combining relevant cases based on discussion of waiver and estoppel.The third part will study the limit from the duty of disclosure. Originally the duty of disclosure obligations of insurers, but if the duty of disclosure requirements are too strict,it will result in the imbalance between contracting parties, so it should be limited to limit the insurer’s defense.The fourth part will discusses the limit of the insurer’s defense from the doubt benefits, which is one of the angles of contract interpretation. The doubt benefits is that, the judges should chose the explanation that is against the insurer, to protect the interests of the weak insured when they face with the doubt of insurance contract terms. I think it is necessary to analyse it because it is prevailing in insurance, although the conclusion is not the truth in many cases.In the last part, I will expound the limit of the insurer’s defense from the doctrine of reasonable expectation, which is another angle of contract interpretation. I will make a thorough inquiry on protecting the rights of the insured from diverse viewpoints. If some reasonable and objective expectations are looked forward when someone enters into an insurance contract, it should be protected though is explicitly excluded by terms. The doctrine of reasonable expectation entrusts the judge with jurisprudence to achieve fairness and justice in significant measure.