An Inquiry On Recovery Priority Of Insurance Subrogation

With the development of the insurance,disputes of the insurance subrogation rights arise from time to time,especially the damage of the insured which is caused by the third party's tort or breach of contract.Although the insured is paid by the insurance,the compensation is not enough to make up for the total loss of the insured.According to the regulation of our country insurance law,the insured has the right to keep demanding compensation from the third party.Meanwhile,the insurer has the insurance subrogation for the third party after paying the insurance compensation.At this time,the recovery right to third party is divided into two parts: The insurer's recovery based on the insurance subrogation and the insured's recovery based on the claim for compensation of his/her damages.If the third party is able to fully pay these two items,the insurer and the insured can be compensated separately.However,if the third party fails to pay,a problem on how to allocate the compensation will arise between the insurer and the insured.Therefore,the following five parts will be discussed in this article:The first part introduces the issue of the recovery priority of insurer's subrogation and insured's claim and related theories.The modern insurance subrogation system originated in the United Kingdom,which purpose is to prevent the insured from obtaining double benefits.The issue of the recovery priority of insurer's subrogation and insured's claim is mainly under three situations of concurrence: the agreed deductible rate in full insurance,the exclusions in full insurance and the under-insurance.As is stipulated in the current “Insurance Law” of our country,the insured still has the right to claim compensation for the damage from the third party after successfully obtaining insurance claims.When the concurrence arises,this problem can be solved by joint action between the insurer and the insured,which is stipulated in “Special Maritime Procedure Law ".Although there is a breakthrough in the procedural law,it still has not solved the dispute of recovery priority between the subrogation and the insured.The second part discusses the three modes falling on the dispute of recovery priority between the insurer's subrogation and the insured's remaining claims,which have been discussed in the extraterritorial law for a long time,including theories of the insurer's subrogation right,the creditor's rights of the insured's remaining claims,and the pro-rata.This article is divided into three parts based on the above three theories,sorts out their legislation and judicature in the main countries of Anglo-American Law System and the Continental Law System and summarizes the advantages and disadvantages of extraterritorial scholars on the application of these rules.The third part discusses the choice of the orientation of our country's legislation.The following two parts will be discussed: firstly,a simple case is established as a model on the empirical analysis to compare the total money of the insurer and the insured,the insurer's recovery rate,and the insured's compensation rate under three situations of concurrence: the agreed deductible rate in full insurance,the exclusions in full insurance and the under-insurance.Secondly,the basic rules are established from the legal point of view.The fourth part is the settlement to the problem of rules implementation,which refers to the "full filling" recognition of the insured's damage.This "full filling" can be calculated by a third party,such as a public assessment agency,and then confirmed by judge.It means this "full filling" refers to the “full recovery”,which can be acknowledged by judicial judgment and parties' settlement.The fifth part discusses the exceptional application of the rules.The law is finally applied to the social life,so the processing method of dispute also needs flexibility according to the complexity of life.This article holds the view that under otherwise stated in the special law and the parties' agreement,the application for the priority of the insured's remaining compensation claims should be excluded.The law can make up for the inadequacy of the party's intension by setting strict standards on the exclusive clauses.