Research On The Legal System Of Viatical Settlements In China

Viatical Settlements is a financial innovation that originated in the United States in the 1980 s and has a history of nearly forty years.On January 2,2018,the former China Insurance Regulatory Commission issued the Pilot management method for personal insurance policy Viatical Settlements(Consultation Draft)(hereinafter referred to as the Consultation Draft).The Consultation Draft defines the definition of the viatical settlements and provides for the business rules,the information disclosure and supervision the information disclosure system of the viatical settlements.The promulgation of the Consultation Draft indicates that China has begun to explore the ways to conduct the viatical settlements transaction.In foreign countries,the viatical settlements has been carried out for a long time,the practice is rich,and the corresponding laws and regulations are relatively sound.However,China's viatical settlements is in the stage of pilot promotion,lacking corresponding practical experience and theoretical research.At present,most of the research is stuck in demonstrating the actual necessity and realistic feasibility of developing the viatical settlements in China,and lacks the analysis of legal feasibility.In addition,various types of research have not legally analyzed the nature of each model of viatical settlements,and there is also a lack of research on the rights and obligations of parties involved in viatical settlements.In the United States,scholars have been studying viatical settlements for a long time.Their research covers the development history of viatical settlements and the nature of viatical settlements services.Taiwan has begun to research and introduce viatical settlements before the mainland.Due to the legal tradition of the civil law system,scholars in Taiwan are more inclined to study the viatical settlements from the perspective of civil and commercial law and insurance law.Based on the research results of scholars from the United States and Taiwan,this paper uses literature review,historical comparison and other research methods to study viatical settlements.The author also attempts to clarify the transaction structure of viatical settlements by analyzing the legal nature of the viatical settlements contract and the viatical settlements commodity purchase contract in this paper.In addition,this paper will also propose a coordination plan for the insurance law system's constraints on viatical settlements,and propose preventive measures for various types of financial risks that may be faced in viatical settlements.The first chapter begins with the introduction of the concept of viatical settlements,and introduces and analyzes the transaction process and participants in each mode of the viatical settlements.In terms of trading patterns,viatical settlements involves two different trading modes,indirect modes and direct modes.In terms of the main body of the transaction involving the transaction,viatical settlements is posted to a plurality of participating entities such as viator,viatical settlement purchaser,and viatical settlement provider.This chapter is the basis for the follow-up of the article,so make a prelude here.The second chapter begins with the analysis of the legal nature of the viatical settlement under the direct transaction model and the indirect transaction mode,and further determines the participants of the viatical settlement in combination with the rights and obligations of the parties to the insurance relationship.In terms of legal nature,the viatical settlements contract should be recognized as the general transfer of life insurance contract rights and obligations with the transfer of policy beneficiary rights as the core.In terms of the attribution of the rights and obligations of the participating parties,the decision-making right of the viatical settlements transaction shall be exercised simultaneously by the proposer and the insured,In view of the separation of the rights and obligations of the proposer and the special legal status of the insured.And the right to receive cash on the policy should also be attributed to the insured,because the insurance contract is aimed to protect the interests of the insured.The third chapter begins with the analysis of the legal nature of the behavior of the insured and the proposer to change the beneficiary in life insurance,and further analyzes the legitimacy and transferability of the proposer's right to designate and change the beneficiary in life insurance.Therefore,it is concluded that viatical settlement provider can inherit the rights of the proposer and change the beneficiary with the insured's consent.Then combined with this conclusion,it is proposed that viatical settlement provider can change the investor as a beneficiary in the indirect transaction codes of the viatical settlement.The legal nature of the viatical settlements commodity purchase contract is a controversial issue in the US viatical settlements practice,because the answer to this question will have an impact on the selection of the regulatory mode for viatical settlements.Based on the nature of insurance and the concept of "securities" in China's securities law,this paper concludes that the viatical settlements is not an insurance activity,nor is it securities recognized by China's current securities law.However,viatical settlements is in line with the requirements of the “investment contract” in the US Securities Law.It is essentially a security.In order to protect the rights of investors and regulate financial supervision,China should expand the scope of securities concepts and incorporate viatical settlements into securities supervision.The fourth chapter analyzes the coordination between the viatical settlements and the special provisions of China's insurance law,such as insurable interest clause and insurer contract termination clause.China's insurance law puts forward two alternative requirements for the insurable interest of life insurance,that is,the proposer has a legally recognized interest with the insured or the insured agrees the proposer to insure him.The viatical settlement is in full compliance with the requirements for insurable interest under China's current insurance law.There are many calls for reforming China's current insurable interest adjustment model,but in the reform,we should recognize the limitations of the insurable interest principle to prevent moral hazard,and avoid paying too much attention to the principle of insurable interest to kill viatical settlement.In addition to the insurable interest,the insurer's right to terminate the contract,the insured's suicide,and the insured's crime all increase the uncertainty of the right of viatical settlement purchaser to request the insurance premium.In order to prevent the investor from losing the right to request the insurance premium because the proposer or the insured violates such provisions,the policy that can be traded should be limited to that with a contract of more than two years.The fifth chapter analyzes the characteristics of the viatical settlement's risk and proposes the overall design of the viatical settlement's supervision based on the analysis of the legal nature of the viatical settlement.Because the risk of fraud is the most common risk in viatical settlement transactions,this paper analyzes the specific manifestations of various types of fraud in viatical settlement transactions,and proposes specific measures to prevent the risk.The innovation of this paper is to first define the legal relationship of viatical settlement transactions,followed by the analysis of the rights and obligations of each participating subject and the possible impact of China's current law on viatical settlement transactions.This article has done a good job of interpreting viatical settlement through a legal perspective.Correspondingly,the shortcoming of this paper is that the policy discount transaction is not currently carried out in China.Therefore,there is no domestic reference for this paper.So,we can only refer to the practice of the United States.However,the practice of the United States is based on a different legal system from China.The practice of the United States cannot fully provide lessons for China.