Source: Consumer Guide Theory Edition Author:
[Abstract] In view of the defects of the principle of utmost good faith and its influence on the development of the insurance industry, this paper discusses the theoretical and practical basis for the insurer to assume the responsibility of utmost good faith, and puts forward some suggestions on strengthening the restraint on the insurer according to the principle of utmost good faith, with a view to perfecting the principle of utmost good faith and China's insurance legislation.
[Keywords:] the principle of utmost good faith, insurer, policyholder
The principle of good faith is the basis of civil and commercial laws in various countries, and it is regarded as "imperial clause" by scholars. Article 4 of the General Principles of Civil Law of our country also stipulates the principle of good faith as the basic principle of our civil law. Due to the luck of insurance contract, the principle of good faith plays an important role in insurance law, which is incomparable to other laws and is known as "the principle of utmost good faith in insurance". Understanding the principle of utmost good faith is an important prerequisite for understanding the insurance law and signing insurance contracts, and perfecting the principle of utmost good faith is one of the important ways to improve the insurance system and safeguard the legitimate rights and interests of insurers and insurance counterparts.
In the early days, the principle of utmost good faith in insurance was mainly used by insurers to bind the insured. With the development of the insurance industry, in order to protect the interests of the insured and prevent the insurer from malicious defense, the insurance laws of various countries have been revised one after another, extending this principle to both the insurer and the insured. The traditional insurance law theory fully expounds the binding force of the principle of utmost good faith on the insured. The purpose of this paper is to explore the application of the principle of utmost good faith to insurers, so as to improve the principle of utmost good faith and insurance legislation.
First, the meaning and content of the principle of utmost good faith
The so-called principle of utmost good faith means that the parties to an insurance contract should be honest and trustworthy to the greatest extent in the process of concluding an insurance contract, and not conceal all important information about concluding the contract, so as to conclude a fair and reasonable contract.
Throughout the legislation of various countries, the basic content of the principle of good faith in insurance law generally includes three aspects: obligation to inform, guarantee and waiver, and trust.
1. obligation to notify. The obligation of disclosure means that the applicant shall truthfully inform the insurer of the important facts related to the subject matter of insurance when concluding an insurance contract. Regarding the content of the notification, the applicant should inform the important facts when applying for insurance. The so-called important fact refers to the fact that can influence a normal and prudent insurer to decide whether to accept the insurance or determine the insurance rate accordingly. Regarding the form of notification, China's Insurance Law stipulates that it is the form of inquiry and answer, that is, all questions raised by the insurer in written form are considered as important facts, while questions not raised by the insurer are not important facts, and the insured has no obligation to inform. The insurer has the right to terminate the insurance contract if the applicant intentionally conceals the facts and fails to perform the obligation of truthful disclosure, or fails to perform the obligation of truthful disclosure due to negligence, which is enough to affect the insurer's decision on whether to agree to underwrite or increase the insurance premium rate.
2. guarantee. Guarantee means that the insurer and the insured agree in the insurance contract that the insured will guarantee the act or omission of a certain matter or the authenticity of a certain matter. It is usually attached to the insurance policy in written form or agreed terms. For example, it is agreed that the insured shall properly keep the subject matter insured. Some warranties are unwritten, that is, implied warranties. Guarantee is the basis of insurance contract. In case of violation, the insurer may obtain the right to terminate the contract or not be liable for compensation.
3. Waiver and estelle. Waiver means that once the insurer gives up the rights arising from the insured or the insured's violation of the obligation to inform or guarantee, it will not be allowed to go back on its word in the future and claim the abandoned rights from the other party.
Secondly, it is necessary to bind the insurer according to the principle of utmost good faith.
Cognitive bias:
From the perspective of jurisprudence and insurance law, the principle of utmost good faith requires all parties to an insurance contract to abide by good faith to the maximum extent, that is, the principle is binding on both the insurer and the insured. However, as far as its specific content is concerned, some scholars believe that the insurer is unlikely to violate the principle of utmost good faith, which mainly binds the insured. "This kind of understanding comes from the study of articles 17 to 2 1 of British marine insurance law 1906, and there is no comprehensive demonstration of the whole insurance activity." Specific to legal norms and judicial practice, the principle of utmost good faith is often the contract criterion that only binds the insured, because it only emphasizes the obligation of truthful disclosure and guarantee of both parties, without making full use of waiver and incontestability, which weakens the binding force on both parties, especially the insurer.
(2) Problems in reality:
Because China is currently in the transition stage of economic system, various laws and regulations on the construction of credit system are not perfect, and China's insurance industry started late, especially in the last decade, unfair competition and extensive scale expansion have appeared in the insurance market, which has led to frequent fraudulent behaviors of insurance companies, misleading and even defrauding policyholders to varying degrees. The main manifestations are as follows: first, the business information of insurance companies is not disclosed enough, and the insured can't understand the information related to integrity such as assets and liabilities and solvency of insurance companies, so they can only make judgments based on subjective impressions and the introduction of agents; Second, the principle of true disclosure is intended to safeguard the interests of insurance companies, and some insurance companies abuse this right and refuse to pay insurance premiums at will; Third, some clauses in the insurance contract limit the conditions for the contract to take effect, but the insurer fails to explain the meaning of the clause and the possible legal consequences to the insured, which leads to the insured mistakenly thinking that the contract will take effect after paying the insurance premium and cannot take extraordinary measures to remedy it; Fourth, the overall quality of the insurance agent team is mixed, and there are endless scams in insurance publicity, and even lawsuits caused by insurance agents signing insurance documents have damaged the industry image and reputation of insurance companies; Fifth, insurance companies "emphasize the exhibition industry and neglect claims;" Paying more attention to premium than management has caused "easy insurance and difficult claims" to the society; The bad impression of collecting money quickly and delaying compensation.
(3) The author's point of view:
Based on the above theoretical deviations and practical problems. The author thinks that with the development of modern insurance industry, the law and market demand have changed greatly, and maintaining the understanding of the principle of utmost good faith in the past is not conducive to the further development of insurance industry. As the basis of insurance activities, the principle of utmost good faith should be applied to both the insured and the insurer in order to realize the balance of interests between the insurer and the insured. This is because:
First, in terms of social impact, although the insurer is less likely to violate the principle of utmost good faith than the insured, the impact on the insurance industry is enormous. The policy holder's violation of the principle of utmost good faith is a scattered and single act, which is an obvious illegal act; The insurer's violation of this principle is a common commercial act and a hidden illegal act, and it is often difficult for the insured to find the basis for making him bear the responsibility. Although this unfairness makes the insurer evade the responsibility temporarily, the damage to the society is long-term and profound, which makes it difficult to expand the insurance business, reduces people's ability to resist risks and increases social instability.
Second, judging from the establishment of insurance contracts, China adopts the principle of "no cause" for the establishment of insurance contracts. Article 12 of China's Insurance Law stipulates: "When the applicant makes an insurance request, the insurer agrees to underwrite it and reaches an agreement on the terms of the contract, the insurance contract is established." In other words, the insurance contract is established after the offer and acceptance, and it will not take effect until the law requires it to be in written form. In most cases, after the insurance policy is issued, the insurance contract is established. If the insurer invokes the relevant restrictive clauses in the policy that the insured does not know or understand, or invokes the insurance provisions that the insured does not know, it is inconsistent with the insurance contract establishment procedures stipulated by Chinese laws and unfair to the insured.
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