Insurance Law of the People's Republic of China (Amended in 2014)
Insurance Law of the People's Republic of China (Amended in 2014)
Insurance Law of the People's Republic of China (Amended in 2014)
Order of the President of the People's Republic of China No. 14
August 31, 2014
(Adopted at the 14th meeting of the Standing Committee of the Eighth National People's Congress on June 30, 1995; amended at the 30th meeting of the Standing Committee of the Ninth National People's Congress on October 28, 2002 in accordance with the Decision on Amending the Insurance Law of the People's Republic of China; re-amended at the 7th meeting of the Standing Committee of the 11th National People's Congress on February 28, 2009; and amended for the third time according to Decisions of the Standing Committee of the National People's Congress on Revising the Insurance Law of the People's Republic of China and Four Other Laws on August 31, 2014)
Chapter I General Provisions
Chapter II Insurance Contracts
Section 1 General Rules
Section 2 Contract of Insurance of the Person
Section 3Contract of Property Insurance
Chapter III Insurance Company
Chapter IV Rules Governing Insurance Business
Chapter V Insurance Agents and Brokers
Chapter VI Supervision and Administration of the Insurance Industry
Chapter VII Legal Liability
Chapter VIII Supplementary Provisions
Chapter I General Provisions
Article 1 This law is enacted with a view to standardizing the insurance activities, protecting the legitimate rights and interests of parties to insurance activities, strengthening supervision and administration of the insurance industry, maintaining social economic order and social public interests and promoting the sound development of insurance business.
Article 2 The term 'insurance" as mentioned in this law refers to a commercial insurance transaction whereby an insurance applicant, as contracted, pays insurance premiums to the insurer and the insurer bears an obligation to indemnify him for property loss or damage caused by a specific contingent accident that is agreed upon in the contract, or to pay the insurance benefits when the insured dies, is injured or disabled, suffers illness or reaches the age or time-limit agreed upon as set in the contract.
Article 3 All insurance activities conducted within the territory of the People's Republic of China shall be governed by this law.
Article 4 Insurance activities shall be conducted in compliance with laws and administrative regulations, with the respect for public morality and shall not infringe upon public interests of the society.
Article 5 The parties concerned in the insurance activities shall abide by the principle of good faith in the exercise of rights and performance of obligations.
Article 6 Insurance businesses must be conducted by insurance companies established in accordance with this Law and other insurance organizations as stipulated in laws or administrative regulations. No other entity or individual may operate insurance businesses.
Article 7 Any legal person or other organizations within the territory of the People's Republic of China that need domestic insurance coverage shall apply to the insurance company established within the territory of the People's Republic of China.
Article 8 Unless it is otherwise prescribed in any other law, the insurance industry shall subject to operation and administration separately from industries of banking, securities and trust operational agency, and the establishment of insurance company shall be separate from that of bank, securities and trust operational agency.
Article 9 The insurance supervision and control authority under the State Council shall exercise supervision and administration of the insurance industry in accordance with this Law.
The insurance supervision and control authority under the State Council shall, upon the need of duty performance, set up dispatch agencies, which shall perform the duty of supervision and administration under the authorization by the insurance supervision and control authority under the State Council.
Chapter II Insurance Contracts
Section 1 General Rules
Article 10 An insurance contract is an agreement whereby the rights and obligations concerning the insurance are specified and agreed by the insurance applicant and the insurer.
An insurance applicant means the party who enters into an insurance contract with an insurer and is obligated to pay the premiums under the contract.
An insurer refers to an insurance company which enters into an insurance contract with an applicant and is obligated to make indemnity or pay insurance benefits under the contract.
Article 11 In concluding an insurance contract, the applicant and the insurer shall reach agreements through consultation and follow the principle of fairness to determine the rights and obligations of all parties concerned.
The principle of voluntariness shall be followed in the conclusion of an insurance contract, except as otherwise provided by laws and administrative regulations.
Article 12 An applicant for the insurance of the person shall have insurable interests in the insured in the conclusion of an insurance contract.
The insured of property insurance shall have insurable interests in the subject matter of the insurance in the occurrence of insured accidents.
Insurance of the person refers to an insurance that takes life and body of the persons as the subject matter of the insurance.
Property insurance refers to an insurance that takes property and relevant interests as the subject matter of the insurance.
The insured refers to the person who is protected under a contract of insurance of the person or of property insurance and enjoys the right to claim for insurance benefits. An insurance applicant can be the insured.
Insurable interests mean the legally recognized interests of an insurance applicant or the insured in the subject matter of insurance.
Article 13 An insurance contract shall be concluded when an insurance applicant applies for insurance and the insurer agrees to underwrite the insurance. The insurer shall issue an insurance policy or other insurance certificate to the applicant in a timely manner.
The contract contents agreed by both parties concerned shall be specified on the insurance policy or other insurance certificate, and the parties concerned may also state the contract contents in other written forms upon an agreement.
The legally concluded insurance contract shall be valid upon the conclusion. Additional conditions or terms on the validity of the contract can be agreed by the applicant and the insurer.
Article 14 Once an insurance contract is concluded, the applicant shall pay the premium under the contract and the insurer shall begin to undertake the insurance liability from the time agreed upon.
Article 15 Unless otherwise stipulated in this Law or agreed in the insurance contract, the applicant may rescind the contract after it is concluded; However, the insurer may not rescind the contract after it is concluded.
Article 16 In concluding an insurance contract, when the insurer inquires about the relevant information concerning the subject matter of insurance or the insured, the insurance applicant shall make an honest disclosure.
The insurer is entitled to rescind the contract if the insurance applicant fails to perform the obligation of making an honest disclosure intentionally or due to gross negligence, thereby materially affecting the insurer from making a decision whether or not to agree with the underwriting or to increase the premium rate.
The right of an insurer to rescind a contract, as prescribed in the preceding paragraph, shall be extinguished without exercising over 30 days since the date the insurer knows the occurrence of accidents for rescinding. The insurer shall not rescind the contract which has been concluded for over two years and shall be obligated to make indemnity or pay insurance benefits for any occurrence of the insured accidents.
If an insurance applicant intentionally fails to perform his obligation of making honest disclosure, the insurer shall bear no obligation for indemnity or payment of insurance benefits for any insured accident occurred prior to the rescission of the contract, and shall not refund the premium paid.
If an insurance applicant fails to perform his obligation due to gross negligence, thereby seriously affecting the occurrence of insured accident, the insurer shall bear no obligation for indemnity or payment of insurance benefits for any insured accident occurred prior to the rescission of the contract, but shall refund the premium paid.
If an insurer has known the fact that the applicant fails to make a honest disclosure in the conclusion of a contract, the insurer may not rescind the contract and shall bear the obligation for indemnity or payment of insurance benefits for any insured accidents.
An insured accident refers to the accident covered by the insurance as agreed upon in the insurance contract.
(Relevant articles: Cases 1 Legislation 1)
Article 17 If an insurer provides standard terms for the conclusion of an insurance contract, it shall attach the standard terms to the policy provided to the applicant and explain the contents of the contract to the applicant.
An insurer shall give a note, which is enough to attract the attention of the applicant on the insurance application, the insurance policy or other insurance certificate, for the clause regarding the exemption of liability of the insurer as provided in the insurance contract, and shall make clear explanations in respect thereof to the applicant in written or oral form, otherwise such clause shall not be binding.
(Relevant articles: Legislation 1)
Article 18 An insurance contract shall contain the following particulars:
1. name and address of the insurer;
2. names and Residences of the insurance applicant and the insured, and the name and residence of the beneficiaries of insurance of the person;
3. the subject matter of insurance;
4. scope of cover and exclusions;
5. insurance term and commencement of obligation of the insurer;
6. amount insured;
7. premium and the way of its payment;
8. the way of payment of indemnity or insurance benefits;
9. liability arising from breach of contract and resolution of disputes; and
10. the date, month and year in which the contract is concluded.
An applicant and an insurer may reach agreements on particulars relating to the insurance.
An beneficiary refers to the person who enjoys the right to claim for insurance benefits as designated by the insured or the insurance applicant in a contract of insurance of the person. The insurance applicant or the insured may be the beneficiary.
The amount insured refers to the maximum amount that an insurer can bear the obligation of indemnity and payment of insurance benefits.
(Relevant articles: Articles 1)
Article 19 For an insurance contract concluded with standard terms provided by the insurer, the following terms and conditions shall be invalid:
1. the insurer is exempted from the obligation in accordance with the law or the liability of applicant or insured is increased; and
2. the applicant, the insured or the beneficiary is excluded from the right provided in the law.
Article 20 An applicant and an insurer may, after consultation, alter the contents of an insurance contract.
To alter the contents of an insurance contract, the insurer shall make notes on the original insurance policy or other insurance certificate, or a written agreement regarding the alternation shall be concluded by the insurance applicant and the insurer.
Article 21 An applicant, an insured or a beneficiary shall notify the insurer of the occurrence of insured accident in a timely manner. Where an insured accident is not notified in a timely manner intentionally or due to gross negligence, with the result that it is difficult for the insurer to determine the nature, cause and extent of the loss, etc. of the accident, the insurer shall not bear the obligation of indemnity or payment of insurance benefits for the part unable to be determined, except for the insured accidents that the insurer has known its occurrence through other channels or should know its occurrence in a timely manner.
Article 22 Where a claim for indemnity or payment of insurance benefits is lodged with the insurer after the occurrence of the insured accident, the applicant, insured or the beneficiary shall, to best of their ability, provide the insurer evidence and other materials relating to the determination of the nature, cause and extent of loss of the accident.
If the provided evidence or materials are deemed as incomplete under the insurance contract, the insurer shall notify the applicant, the insured or the beneficiaries all at once for additional evidence or materials.
Article 23 An insurer shall, after the receipt of a claim for indemnity or for payment of insurance benefits, determine the matter without delay and notify the insured or the beneficiary of the determination result; For the complex case, the determination shall be made within 30 days, with the exception as otherwise agreed in the contract. For the case falling into the insurance coverage, the insurer shall perform its obligation of indemnity or payment of insurance benefits within 10 days after reaching an agreement on the indemnity or payment with the insured or the beneficiary. If there is an agreement in the insurance contract on the time limit for the indemnity or payment of insurance benefits, the insurer shall perform its obligation accordingly.
If an insurer fails to perform its obligations as prescribed in the preceding paragraph in a timely manner, the insurer shall compensate the insured or the beneficiary for any damage incurred thereby in addition to the payment of insurance benefits.
No entity or individual may interfere with the insurer's performance of its obligation for indemnity or payment of insurance benefits, nor shall it restrict the right of the insured or the beneficiary from obtaining the insurance benefits.
(Relevant articles: Legislation 1)
Article 24 For the case not falling into the insurance coverage, the insurer shall send a notice declining indemnity or payment of insurance benefits to the insured or the beneficiary in three days after the determination made in accordance with Article 23 of this Law with an explanation of reason.
Article 25 If the total amount of indemnity or insurance benefits is not determined within 60 days after the receipt of a claim for indemnity or insurance benefits, the insurer shall make the primary payment of minimum amount which can be determined by the evidence and material in hand, and shall accordingly pay the balance after the amount of indemnity or insurance benefits is finally determined.
Article 26 With respect to insurances other than life insurance, the right of the insured or the beneficiary to claim for indemnity or insurance benefits shall cease to exist if the insured or the beneficiary fails to exercised such right within two years from the date the insured or the beneficiary knows or should know the occurrence of the insured accident.
With respect to life insurance, the right of the insured or the beneficiary to claim for indemnity or insurance benefits shall cease to exist if the insured or the beneficiary fails to exercise such right within five years from the date the insured or the beneficiary knows or should know the occurrence of insurance accident.
Article 27 An insurer is entitled to terminate an insurance contract and not to refund the premiums if the insured or the beneficiary fabricates the occurrence of insurance accident which has not occurred, and lodge a claim to the insurer for indemnity or insurance benefits.
If the applicant, the insured or the beneficiary causes the occurrence of insurance accident on purpose, the insurer is entitled to terminate the insurance contract, shall bear no obligation for indemnity or insurance benefits, and except otherwise provided in Article 43 of this Law, shall not refund the premiums.
If, after an insurance accident occurs, the applicant, the insured or the beneficiary is found to have fabricated the cause of the accident or exaggerated the extent of loss with forged or altered relevant evidence, information or other proofs, the insurer shall bean no obligation of indemnity or insurance benefits for the portion which is fabricated or exaggerated.
If the applicant, the insured or the beneficiary is found to have committed any of the acts stipulated in the preceding three paragraphs and have resulted the payment of insurance benefits or other expenses by the insurer, such payment shall be refunded or indemnified for.
Article 28 Re-insurance means the assignment by an insurer of part of its underwriting to another insurer assuming the form of a contractor.
At the request of the re-insurance assignee, the re-insurance assignor shall inform in writing the reinsurance assignee of its own liability and all relevant information with respect to the original insurance.
Article 29 The re-insurance assignee shall not claim for the payment of premium from the original insurance applicant.
The insured or the beneficiaries of the original insurance shall not claim for indemnity or insurance benefits from the re-insurance assignee.
The re-insurance assignor shall not decline or delay the performance of the originally insurance liability on the pretext of non-performance of re-insurance liability by the re-insurance assignee.
Article 30 If there is any dispute between the insurer and the applicant, the insured or the beneficiary over the clauses in an insurance contract concluded with the standard terms provided by the insurer, such disputed clauses shall be interpreted in accordance with the general understanding. Where there are two or more interpretations for the contract clauses, the People's court or arbitration organizations shall interpret such disputed clauses in favor of the insured and the beneficiaries.
(Relevant articles: Legislation 1)
Section 2 Contract of Insurance of the Person
Article 31 An insurance applicant shall have insurable interests in the following persons:
1. the applicant himself;
2. the applicant's spouse, children and parents;
3. other member of the family or blood relatives other than those specified in the preceding paragraph for whom the applicant has or share the obligation of foster, support or maintenance; and
4. laborers who have a relationship of employment with the applicant.
Except the provisions of the preceding paragraph, if the insured consents to the applicant concluding a contract for him, the applicant shall be deemed as having insurance interest sin the insured.
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