The legal protection of the insured

: a comparative study of Chinese, UK, Australian insurance law

Abstract

Insurance originated in England. Many common law principles and rules enunciated centuries ago in respect of insurance are still applied. Chinese insurance legislation is much affected by the English common law principles as well as by principles and rules enunciated in other western countries. The present Chinese Insurance Law is not only modeled on the common law principles and rules, it also has several characteristics of traditional Chinese law. It is a comprehensive piece of insurance legislation which deals with many issues in insurance including insurance contracts, insurance organizations, insurance supervision and insurance intermediaries. Besides, the protection of the insured’s interest is also an important issue dealt with by the Chinese Insurance Law. Due to lack of professional knowledge and skills, insureds are always in a weak bargaining position when they face a contract of insurance containing obscure and complicated terms. The insured’s power to negotiate contractual terms is very limited since the insurer will only be prepared to enter into a contract of insurance upon its own terms. In addition, insurance laws and regulations generally protect the insurance industry and the insurer, and impose onerous duties on the insured. For example, the insured is required to fully disclose all the material facts to the insurer, even facts outside his actual knowledge. If the insured fails in this duty, the consequences could be serious for him. These insurance regulations perpetrate the inequity between the insurer and the insured. In the last few decades, however, much attention has been paid to the weaker position of the insured. Insurance law reforms are taking place in many countries for reestablishing justice and balancing the rights and duties of the insurer and the insured. Such reforms put the insured in somewhat better position. The reforms concern several important questions, such as the bargaining power of the insurer and the insured, the need for insurance contracts to strike a balance between the interest of the insurer and the insured, the desirability of ensuring that the manner in which insurance contracts are negotiated and entered into is not unfair, and there are no unfair provisions in insurance contracts. In addition, with economic globalization and insurance liberalization, free competition is regarded as important for the insurance industry, because it ensures the provision of the best products at the cheapest prices. This thesis puts special emphasis on Chinese insurance laws and regulations. Through comprehensive discussions of insurance regulatory issues, including the doctrine of utmost good faith, duty of disclosure, insurable interest, insurance contract, claims, supervision of insurance industry, the thesis examines the essential elements of legal protection of the insured and analyses the relevant regulatory issues. A comparative study of the relevant regulations existing in China and developed common law countries, like the UK and Australia, has been made whenever appropriate. This approach helps us not only to examine and evaluate insurance laws and regulations of China, but also to indicate the gaps that exist in the Chinese insurance laws and regulations. It also gives us an insight into recent developments in this field.

Date of Award	14 Jul 2006
Original language	English
Awarding Institution	City University of Hong Kong
Supervisor	Dhirendra Kumar SRIVASTAVA (Supervisor)