Abstract: Honesty is honesty and trustworthiness, and honesty is the lifeline of insurance. Judging from the current situation of China's insurance industry, many realities make people feel that the insurance integrity is not optimistic, such as the applicant's false information or fraudulent insurance, and the insurer's dishonesty in business and claims settlement, which has affected the healthy development of China's insurance industry to some extent. This paper intends to discuss the concept of the principle of utmost good faith and its reasons, content, embodiment in insurance law, lack of good faith and legislative thinking as the basic principle of insurance law.
Key words: the principle of utmost good faith in insurance, telling the truth, guaranteeing waiver and estelle embody insurance supervision.
First, the concept of the principle of utmost good faith and the reason why it is stipulated as the basic principle of insurance law.
As one of the four basic principles of modern insurance law, the principle of utmost good faith originated from marine insurance. In early marine insurance, the ship or cargo that was the subject of insurance when the applicant insured was often at sea or other ports, and the real situation could only be informed by the applicant under the current conditions; According to the notice of the applicant, the insurer decides whether to underwrite, estimates the insurance risk and determines the insurance rate. Therefore, the truth told by the insured or the insured has a great influence on the insurer. The principle of good faith requires the parties to an insurance contract to be higher and more specific than ordinary civil contracts, that is, to abide by the principle of utmost good faith. This principle was first confirmed in the British Marine Insurance Act 1906. Article 17 of this law stipulates: "Marine insurance is a contract based on the principle of utmost good faith. If either party fails to abide by the principle of utmost good faith, the other party may declare the contract invalid. "
(A) the meaning of the principle of utmost good faith
Insurance contract is a lucky contract based on honesty and credit, which is the basis of evaluating the effectiveness of insurance contract and plays a very important role in insurance contract. China scholars have different views on the connotation of the principle of good faith, and the representative ones are:
First, "semantic theory". In his view, the principle of good faith requires that participants in civil activities must not commit any fraudulent acts and abide by their credit; ①
Second, the "general clause theory". In its view, the principle of good faith is a general clause with uncertain extension, but it has mandatory effect; ②
Third, "the will of legislators." It is believed that the principle of good faith is the will of legislators to require civil subjects to maintain the balance between the interests of both parties and the interests of the parties and the society in civil activities, and it is also the requirement of legislators to realize the balance of the above three interests. ③
Fourth, the "dual function theory". It is believed that the principle of good faith combines moral norms with legal norms, which has the dual functions of legal regulation and moral regulation, making the legal provisions extremely flexible, so the court enjoys greater discretion and can directly adjust the rights and obligations between the parties by excluding the autonomy of the parties. ④
Fifth, the "hierarchy theory". It is advocated to analyze the principle of good faith from three aspects: legislative purpose, normative content and judicial significance; ⑤
Sixthly, Mr. Shi Shangkuan, a scholar in Taiwan Province Province of China, believes that the principle of good faith has the following meanings: first, there is a "credibility" factor, that is, legal relationship, which takes into account the interests of the other party and measures what the other party expects from their own side, so that their legitimate expectations will not fail; Second, it contains "sincerity factor", and "sincerity" means "success", including adults, doing their thing; Third, it conforms to the meaning of trading habits, but does not include trading habits that are not conducive to protecting the legitimate expectations of the parties. ⑥
To sum up, we believe that the principle of utmost good faith in insurance law means that both parties to an insurance contract must fully and completely perform their obligations with utmost good faith in the process of concluding and performing the insurance contract, and must not deceive or conceal important information about the subject matter of insurance from the other party, and strictly abide by the stipulations and commitments of the insurance contract.
(B) Why is the principle of good faith the basic principle of insurance law?
Article 5 of the Insurance Law of People's Republic of China (PRC) (hereinafter referred to as the Insurance Law) stipulates: "The parties to insurance activities shall follow the principle of good faith when exercising their rights and performing their obligations." This is determined by the particularity of the insurance contract. The reasons why insurance activities emphasize the principle of utmost good faith are as follows:
First, the insurance contract is a lucky contract with uncertainty. The so-called lucky contract refers to the mutual agreement that one or all of the parties rely on uncertain events to gain benefits or suffer property losses. ⑦ For a lucky contract, the insurer's decision whether to underwrite or not and how to determine the premium rate depends entirely on the objective judgment of the subject matter insured. Only when the risk accident agreed in the contract occurs, the insurer, as a party to the insurance contract, needs to bear the responsibility of paying the insurance premium according to the insurance contract; However, the occurrence of insurance risks is closely related to the parties concerned. For the insurer, if the risk does not occur, there is no need to pay the insurance premium. Therefore, an insurance contract is essentially different from a general economic contract in which the risks are borne by the parties themselves. The operation of modern insurance is based on the law of large numbers. Under the law of large numbers, the insurance premium paid by the insurer constitutes an insurance fund that bears the insurance risks. This insurance fund belongs to each insured, and the interests of each insured are the same. This fund, like public property, belongs to all members of society, but no one is allowed to possess, use, benefit and dispose of it at will, and no one is allowed to destroy it at will; Similarly, any damage caused by the insured's malicious claim against the insurer does not harm the interests of the insurer, but directly affects the interests of every insured by destroying the stability of insurance funds. Therefore, both parties to the insurance contract must follow the principle of utmost good faith and strictly perform the insurance contract.
Second, compared with general contracts, insurance contracts have obvious information asymmetry. On the one hand, the subject matter of the insurance contract is the subject matter of the insured or the possible future danger of the person, which is in an uncertain state. Insurers can insure uncertain risks according to the estimation and calculation of the degree of danger. Because the subject matter of insurance is under the control of the insured before and after the insurance, the insured is most aware of the dangerous situation of the subject matter of insurance, but it is difficult for the insurer as a risk taker to fully understand the specific situation of the subject matter of insurance; On the other hand, because the terms of insurance contracts are drawn up by professionals, their contents are often very complicated, including many insurance professional terms, and it is difficult for ordinary people to accurately understand the contents of insurance contracts, especially those involving professional and technical issues. Therefore, if there is no requirement of utmost honesty between the insured and the insurer, the possible adverse selection among the insurer, the insured or the insured will greatly increase, thus endangering the normal development of the insurance industry.
Third, from the perspective of the industry characteristics of insurance, insurance cannot be separated from the principle of utmost good faith. Insurance plays a very important role in the national economy and is known as a social stabilizer. The characteristics of insurance management are: first, the collection of insurance premiums is decentralized. The principle of insurance operation is that each insured forms a certain amount of insurance funds by paying a certain amount of insurance premium to the insurer, and the insurer bears the possible risks of the insured; The more policyholders, the more insurance premiums collected, the larger the insurance fund, the safer the insurance operation and the more reasonable the insurance allocation, and the greater the possibility of the insurer's profit. These require insurance companies to adhere to the principle of utmost good faith in order to attract more policyholders to buy insurance; Second, the safety of insurance business. Steady operation is a special requirement of the insurance industry, and China also has clear restrictions on the investment channels of insurance funds, which is also in line with the interests of the insured; Third, the responsibility of insurance funds. Insurance funds belong to the insurer's liabilities to the insured. The insurer shall not distribute the insurance funds as profits or turn them over as profits, but can only make full use of them to ensure value-added. Therefore, the healthy development of the insurance industry is inseparable from the principle of utmost good faith.
To sum up, the insurance industry is based on honesty, and honesty is the foundation of the insurance industry; Insurance contract and industry characteristics determine that insurance should follow the principle of utmost good faith.
Second, the content of the principle of utmost good faith
The content of the principle of utmost good faith is mainly reflected by the good faith obligations of both parties to the insurance contract, including the obligation of truthful disclosure and guarantee of the applicant or the insured, the obligation of explanation of the insurer and the obligation of waiver and estoppel.
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