Fundamental Principles of Insurance Contract Law and Practice in the People's Republic of China A Comparative Study with English and Australian Counterparts

Abstract

The Insurance Law 1995 (PRC) is the first comprehensive insurance legislation since the foundation of the People's Republic of China in 1949. It consists of insurance contract law and insurance regulation. This study concerns only the insurance contract law, focusing on three fundamental principles, namely the principles of insurable interest, utmost good faith, and subrogation. The main theme of this study is that, through examination and analysis, and by comparative methodology, of the provisions relating to the three principles, problems in these provisions are to be found and recommendations on how to amend them are to be proposed. It is intended this study will also help us to understand other similar problems in the whole Chinese insurance contract law. Many concepts adopted in the Insurance Law (PRC) are English in origin. This research attempts to trace the origin and the evolution of these concepts in England and to seek their real meanings in order to find and solve problems of confusions, ambiguities, contradictions and unfairness in Chinese insurance law. The Australian Insurance Contracts Act 1984 codifies the common law and insurance practice in Australia and mitigates the common law for its harshness to consumers and is regarded as a model for insurance law reform. So many Australian approaches are suggested as suitable to follow in order to amend Chinese law. This thesis starts with a brief introduction stressing the purpose and methodology of this research. Then the background is laid down concerning China's politics, economic reform, legal system and the development of China's insurance industry, under which the Insurance Law has been shaped. This is followed by three chapters - the main part of this study dealing with the three fundamental principles of the insurance contract law by examining and comparing the Chinese approach with the English and Australian counterparts. By doing so, problems in the Insurance Law are identified and better solutions are figured out. This research concludes with an emphasis on the urgency for amendment of the Chinese insurance contact law by summarising the preceding examination and analysis of the three principles. It finally ends with a number of proposed amendments of relevant provisions of the Insurance Law which it is hoped will provide useful models for the improvement of the whole Chinese insurance law.