On The Participation Right Of The Insurer In Reconciliation Of Liability Insurance

Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Insurance Law of the People's Republic of China(IV),published on July 31,2018(hereinafter referred to as "Foreign Interpretation of Insurance Law IV")Article 19 clearly stipulates the right of reconciliation of the liability insurer,the end of the "Insurance Law of the People's Republic of China"(hereinafter referred to as the "Insurance Law")does not clearly stipulate the history of the responsible insurer's right to reconcile.The provisions of Article 19 of the Judicial Interpretation IV of Insurance Law make it possible for the liability insurer to exercise the right of reconciliation to become a statutory right in the field of insurance practice.The local courts have a clear legal basis when trying relevant cases.Throughout its development process,the insurer's right to reconciliation has experienced two different stages,from contractual rights to statutory rights.Prior to the Fourth Interpretation of Insurance Law,this right was mainly manifested in the form of clauses through insurance contracts.Article 19 of the Judicial Interpretation IV of the Insurance Law focuses on safeguarding the interests of the insurer and gives the insurer the right to participate in the settlement of the insured and the victim third party,so that it can firmly grasp whether the settlement agreement is binding on it.The initiative of force to prevent the adverse consequences of malicious collusion between the two.In insurance practice,the insurer,the insured and the victim third party form a dangerous community,which are closely connected and inseparable.After an insurance accident occurs,in the process of reconciliation participation,the insurer has the right to decide,recognize,defend,and reconcile the settlement agreement reached between the two.Upon approval by the insurer,the insured may require him to assume insurance liability under the settlement agreement.In the process of exercising the right of reconciliation by the insurer,it is not of course not binding that it is not subject to its approval,and it should be determined on a case-by-case basis.If the amount of settlement is within the scope of insurance liability and is not improper,the insurer shall still be liable for compensation.If the insured and the third person maliciously collude,the insurer shall only be liable for compensation within the scope stipulated in the contract terms.In addition,the insurer should adhere to the principle of good faith.If the insurer abuses the right to participate in the settlement based on subjective malice,the insured may require him to bear the liability for damages.At the same time,based on humanitarian considerations,the insurer may not be liable for compensation for the emergency relief expenses advanced by the insured.Finally,in order to facilitate the insurer to better exercise the right to participate in reconciliation,the insured should actively fulfill the obligation to notify,the obligation to provide documents,and the obligation to prevent losses after the occurrence of an insurance accident.Article 19 of the Judicial Interpretation IV of Insurance Law is undoubtedly a legal breakthrough with great significance.It will undoubtedly have very important positive value for the insurance structure,and will also greatly promote the prosperity and development of China's insurance industry.However,there are also many controversies.For example,the rights granted to the insurer are too large,not deep enough and specific,which also hides the risk of the insured's legitimate interests being damaged.For example,although the insurer has the right to claim re-approval,from the perspective of the insurance practice,the clause is too general,and it is easy to cause inefficiency in the handling of insurance accidents,and even intensify the contradiction between the parties to the insurance structure,which is obviously contrary to the purpose of the legislator.Therefore,it is necessary to put forward some suggestions for targeted improvement.This is not only a theoretical innovation,but also an urgent need for practical operation.For example,while giving the insurer a right to reconcile the participation,the corresponding restraint on the exercise of the right by the insurer is strengthened,and the procedural provisions on the re-approval of the insurer are specifically refined.In addition,the insured not only has the obligation to notify the insurance,but also can increase the obligation to settle the notice.Since the insurance contract is basically a format clause,and the insurer's right to reconciliation has risen to a statutory right,it is also indispensable to strengthen the supervision and management of the right in the insurance clause.