Research on Problems of Insurance Contracts

Legislators are preparing for the amendment of the Insurance Act (mainly the part on contracts). In 2003, the Supreme People' s Court announced the judicial interpretations of insurance contracts (a draft for invitation of recommendation). This paper discusses several practical issues about insurance contracts. The author believes that the insurer should be liable for emergencies occurring before acceptance. If the insured must ask the insurer' s leave to convey a policy, it would cause detriment to the security of transactions or to the consumers' interests. Furthermore, the insured should be able to revoke a policy as the insurers are entitled to retain the policy. Since the cash value of a policy and the insurance money are both protected interests of insurance contracts, owners of them should be of the same status. Invalidation of over insurance is more important in valued policy than in open policy, for over insurance in valued policy is equal to gambling. The Insurance Act provides that the insured have the duty to mitigate damage in an emergency and to bear the salvage costs. Such provisions should be amended, for they are not only unfair to insurance customers but also useless in damage avoidance.