Insurance Law of the People's Republic of China
Insurance Law of the People's Republic of China
Insurance Law of the People's Republic of China
Order of the President [1995] No.51
June 30, 1995
(Adopted at the 14th session of Standing Committee of the 8th National People's Congress on June 30, 1995)
Chapter I General Provisions
Article 1 This law has formulated with a view to standardizing the insurance activities, protecting the legitimate rights and interests of parties to insurance activities, strengthening the supervision and administration of the insurance business and promoting its healthy development.
Article 2 Insurance used in this law refers to the act of payment of premiums by the insureds to insurers and the responsibility of the insurers to give indemnity to the insureds in case of losses to property of the formers caused by a specific contingency or perils of death, injury, sickness of the formers upon the stipulated age according to terms as set in the contracts.
Article 3 All insurance activities within the territory of the People's Republic of China shall abide by this law.
Article 4 Insurance activities shall be governed by law, administrative decrees and regulations and be undertaken according to the principle of voluntariness, honesty and creditability.
Article 5 Insurance companies shall be set up according to this law to engage in commercial insurance business. No other unit or individual is allowed to engage in such business.
Article 6 Legal persons and other organizations which want to be insured within the territory of the People's Republic of China shall enter into insurance policy documents with the insurance companies within the territory of the People's Republic of China.
Article 7 In carrying out business, insurance companies shall follow the principle of fair competition. Illicit competition is not allowed.
Article 8 Financial supervision departments of the State Council shall exercise supervision and administration of the insurance business according to the provisions of this law.
Chapter II Insurance Contract
Section 1 General Provision
Article 9 An insurance contract is an agreement for defining insurance rights and obligations of the insureds and the insurers.
An insured refers to a person who has signed insurance contract with an insurer and undertakes the obligation of paying insurance premiums according to the amount stipulated in the insurance contract.
An insurer refers to an insurance company which has signed insurance contracts with the insured and undertake the responsibility to pay indemnity or insurance money to the latter.
Article 10 In signing an insurance contract, the insurant and the insurer shall observe the principle of fairness, mutual benefit, reaching agreements through consultation and voluntariness without harming the public interest.
Insurance companies or other units are not allowed to sign insurance contracts with others by coercion except otherwise provided by law or administrative decrees or regulations.
Article 11 An insured shall own the insured interest on the objects for insurance.
If an insured has no insured interest on the subjects for insurance, the insurance contract shall be invalid.
Insured interest refers to the interest of the insured on the objects for insurance recognized by law.
Objects for insurance refer to property or related interest insured or life and health of a person insured.
Article 12 An insurance contract shall hold after the insured applies for insurance and the insurer agrees to underwrite the insurance and the two sides have reached agreement on the clauses of the contract. The insurer shall issue insurance policies or other insurance certificates to the insured in good time and specify on the insurance policies or other insurance documents the contents of the contracts agreed by the two sides.
The insured and the insurer, upon agreement, may also conclude insurance contracts in the form of written agreement other than those provided for in the preceding paragraph.
Article 13 After an insurance contract is concluded, the insured shall pay premium as agreed upon in the contract and the insurer shall start to undertake insurance liabilities at the time agreed upon.
Article 14 Insured may terminate the insurance contract after the contract is signed except otherwise provided for by this law or by the insurance contract.
Article 15 The insurer is not allowed to terminate the insurance contract after the contract is signed except otherwise provided for by this law or by the insurance contract.
Article 16 In concluding an insurance contract, the insurer should explain the contents of the clauses of the insurance contract and may raise inquiries on matters concerning the objects for insurance or the insured, and the insured shall make true representations.
If the insured conceals facts deliberately and refuses to perform the obligations of making true representations or fails to perform the obligations of making representations due to negligence that would be enough to affect the insurer from taking the decision of whether or not to agree to accept the insurance or raise the insurance premium, the insurer has the right to terminate the insurance contract.
If the insured deliberately refuses to perform the obligations of making true representations, the insurer shall not undertake to pay indemnity or insurance money for contingency that occurs before the contract is terminated and shall not return the insurance premium.
If the insured fails to perform the obligations of making representations due to negligence, thereby seriously affecting the occurrence of insured risks, the insurer shall not undertake to pay indemnity or insurance money for contingency that occurs before the contract terminates but may return the insurance premium.
Insured risks refer to the contingencies or perils covered by the insurance as agreed upon in the insurance contract.
Article 17 If an insurance contract provides for the exemption of liabilities for the insurer, the insure shall clearly state in before signing the insurance contract. If no clear statement is made about it, the clause shall not be binding.
Article 18 An insurance contract shall contain the following:
1. Name and domicile of the insurer;
2. Names and residences of the insurance and the insured and the name and residence of the beneficiaries of life insurance.
3. Objects for insurance;
4. Insurance liability and liability exemption;
5. Insurance term and the starting time of insurance liabilities;
6. Insured value;
7. Insured amount;
8. Premium and the method of payment;
9. The method of payment of insurance indemnity or insurance money;
10. Liabilities for breach of contract and the handling of disputes;
11. The year, month and date in which the contract is signed.
Article 19 The insurant and the insurer may reach agreement on related matters other than those stated in the preceding paragraph.
Article 20 The insurant and the insurer, after consultation, may alter the contents of the insurance contract within the valid period of the insurance contract.
In altering the contents of an insurance contract, the insurer shall take notes on the original insurance policies or other insurance documents or attach a rider or a written agreement on the alteration signed by the insurant and the insurer.
Article 21 The insurant, the insured or beneficiaries shall notify the insurer of the occurrence of the insured risks in time after they have learned about them.
The insured refers to a person who is protected by the property or life insurance contract and who enjoy the right to insurance claims. An insurant may be an insured.
A beneficiary refers to a person who has been designated by the insured or the insurant to enjoy the right to insurance claims. The insurant or the insured may be beneficiaries.
Article 22 In claiming for consideration or payment according to an insurance contract after an insured contingency occurs, the insurant, the insured or the beneficiaries are obliged to provide evidence or materials to prove the nature and causes of the contingency and losses caused by it.
If the insurer deems the evidence or materials provided incomplete according to the agreement in the insurance contract, the insurer shall notify the insurant, the insured or the beneficiaries and demand for additional evidence or materials.
Article 23 After receiving the claim by the insured or beneficiaries for compensation or insurance payment, the insurer shall make a timely verification and perform the obligations of compensation or payment within ten days after reaching an agreement on the compensation or payment with the insured or beneficiaries if the case is of insured liability. The insurer shall make out compensation or payment according to the insured amount and according to the time limit for compensation or payment as agreed in the insurance contract.
If an insurer has failed to perform the obligations provided for in the preceding paragraph, the insurer shall compensate for the losses arising therefrom in addition to the payment of insurance money.
No unit or individual is allowed to illegally interfere in the performance by the insurer of the liabilities to compensation or payment; nor shall it limit the right of the insured or beneficiaries from obtaining the insurance money.
The insured amount refers to the maximum amount for compensation or insurance money payment to be paid by the insurer.
Article 24 If the insurer does not deem a contingency as insured liability after receiving the claims for compensation or insurance money from the insured or beneficiaries, the insurer shall issue a notice to insured or beneficiaries of the refusal of the claim.
Article 25 The insurer shall pay in advance according to the minimum amount established by the evidence or materials if the amount for compensation or payment cannot be established within 60 days starting from the date of receiving the insurance claims and related evidence and materials. The differences shall be made up for after the insurer finally establishes the amount of compensation or payment.
Article 26 The right to claims for compensation or insurance payment by the insured or beneficiaries covered by insurance other than life insurance shall cease to exist if it is not exercised within two years starting from the date when the insured risk is known.
The right to claims for compensation or insurance payment by the insured or beneficiaries covered by life insurance shall cease to exist if it is not exercised within five years starting from the date of the occurrence of the insured risks.
Article 27 If the insured or beneficiaries falsify the occurrence of insured risks which have not occurred and claim for compensation or insurance payment, the insurer has the right to terminate the insurance contract, with the insurance premiums not to be returned.
If the insurant, the insured or beneficiaries deliberately fabricate the occurrence of the insured risks, the insurer has the right to terminate the insurance contract and shall refuse to perform the obligations of compensation or insurance payment, except otherwise provided for in the first paragraph of Article 64 of this law, with the insurance premiums not to be returned.
If, after an insured contingency occurs, the insurant, the insured or beneficiaries are found to have forged or fabricated related certificates, materials or other evidence to prove the causes of the insured risks or for exaggerating the losses, the insurer shall not compensate or pay for the part falsified.
If the insurant, the insured or beneficiaries are found to have committed one of the acts listed in the preceding three paragraphs that have caused the insurer to pay the insurance money or other expenses, the payment shall be returned or compensated for.
Article 28 If an insurer transfers part of a liability assumed to another insurer, it is re-insurance.
At the request of the re-insurance underwriter, the re-insurer shall make representations of its own liabilities or the related information of the original insurance to the re-insurance underwriter.
Article 29 The re-insurance underwriter shall not claim for the payment of premium from the insurance of the original insurance contract.
The insured or beneficiaries of the original insurance contract shall not claim for compensation or insurance money from the re-insurance underwriters.
The re-insurer shall not refuse to perform or delay the performance of the originally insured liability on the pretext of non-performance of the re-insurance liability by the re-insurance underwriter.
Article 30 If the clauses of an insurance contract are in dispute among the insurer or the insurant, the insured or beneficiaries, the people's court or arbitration organizations shall make interpretations favorable to the insured and beneficiaries.
Article 31 The insurer or re-insurance underwriter shall be obliged to keep confidential the information about the operations and property of the insurant, the insured or re-insurer it has got to know in handling the insurance business.
Section 2 Property Insurance Contract
Article 32 A property insurance contract is an insurance contract with the property or related interests as the subject of insurance.
The property insurance contract that appears in this section is called "contract" for short, except otherwise specified.
Article 33 The insurer shall be notified of the transfer of the objects for insurance and the insurance contract can be altered only after getting the approval of the insurer to continue to underwrite the policy.
......