Restrictions on the insurer’s defence of non-disclosure or misrepresentation in Chinese Insurance Law

At common law, before concluding an insurance contract, the insured is obliged to disclose material information to the insurer in order that the insurer can properly assess the risk to be insured. If the insured fails to comply with the obligation, the insurer may plead the defence of non-disclosure or misrepresentation to rescind the contract and repudiate liability. In order to prevent the insurer from abusing the right of rescission, the Chinese Insurance Law provides a number of restrictions on the insurer�s defence of non-disclosure or misrepresentation. This article considers the approaches adopted in the Insurance Law 2009 to the restrictions on the insurer�s defence, and critically examines how Chinese courts interpret and apply the rules of law in relation to such restrictions. Meanwhile suggestions on how to improve the Insurance Law on some specific issues in relation to the restrictions are put forward with references to the approaches in some other jurisdictions, including Australia.