Research On The System Structure Of Insurance Subrogation

As the concrete implementation of Principle of Indemnity, insurance subrogation is the basic system in insurance law, which involved insurer, insured and the third party. To prevent the unjustified hinder from regular rights exercise and duty performance, certain premises and some additional conditions should be fulfilled in subrogation. The purpose of those series institutional arrangements is balancing the interest between those three parties and fulfills the security function in insurance law. This research is basic on combining theory with practice, aim at solution in justness foundation and system establishment in subrogation, try to improve the legislation system with promoting reach on subrogation system, guiding the work in legislation、enforcement and judicial process. Those finally approach to realize legal governance in insurance industry while stimulate the rise in insurance law researching. This article demonstrates such question as follows.The first chapter is the theoretical framework of insurance subrogation. First, There are three interrelated ontology functions for insurance subrogation, including preventing overcompensation of the insured, assuring that a wrongdoer who is legally responsible for the harm will not receive the windfall of being absolved from liability, and helping insurers to reduce premiums for the insured and to maintain normal operations. These functions constitute the legal basis of insurance subrogation. Second, In respect of identifying the nature of the insurance subrogation, Chinese Insurance Law should follow the theory of assigning claims ipso jure without consent of or notification to the party, rather than procedures subrogation theory. Finally, insurance subrogation interpretation could legitimately be specific. Inherent nature of insurance subrogation is legal assignment of claims, its external structure is unreal joint debt (unechte Gesamtschulden). Insurance subrogation does not include subrogation in rem, but recoup and reimbursement are special forms of insurance subrogation.The analysis of applied scope lies in the second chapter. In the original insurance, Insurance subrogation is attached to indemnity policies; it is not available in fixed sums insurances. Although the ultimate goal of Insurance Law being amended should be going beyond the scope of property insurance, the extension of insurance subrogation in indemnity accident insurance and health insurance should be postponed for some time, since the extension of insurance subrogation is appropriate only on the condition that the adequate system of multiple protection of the victims is established, and the "Make Whole" principle is put into practice. There are affirmative and negative views for the problem about the application of insurer’s subrogation in the reinsurance. This paper affirms the nature of reinsurance and expounds the reinsurance through literal construction and systematic interpretation in insurance law. Meanwhile, the reinsurance and substitute mechanisms are compared and the possibilities for the subrogation how to applying to the specific types of reinsurance are studied. In view of above-mentioned reasons this research admits that the reinsurer should have subrogation. For reinsurer how to apply to the subrogation, this paper might adopt such legislative policy that the insurer may exercise the subrogation right to claim which belongs to the reinsurer and its own right to claim together, and then return the corresponding share to the reinsurer. However, when the reinsurer and insurer have specific agreement, they can negotiate other subrogation model by themselves.The third chapter is about constitutive requirements in subrogation. The four parts of constitutive requirements in subrogation is the claim for damage compensation between insured and the third party; the insurer liability based on insurance contract; the full payment has been paid by insurer and the object consistency of damage compensation (Kongruenzerfordernis)In the fourth chapter, the author will discuss how the exercises the right of subrogation. First, the subrogation action should be prosecuted in the name of the insurer. Second, insurance subrogation needs to follow different ways at distinct exercise stages. The insurer can start consult with or sue the third party in the insured’ name even before he pays the insured for his loss. There will be two methods for adopting the subrogation after insurance payment according to the relationship between the amount of insurance payment and the amount of the insured loss, for one hand is the subrogation action after the insured being completely compensated through insurance payment, for the other is the subrogation action after the insured while the compensation is not completed. At last, the identity of third party usually has no affective on existing of insurance subrogation, but still some special subject should be treated seriously. Not like when the third party becomes insurer or country, general the subrogation could not be exercise if insured or someone has mutual benefit with insured. As the exception, subrogation can exercise in compulsory automobile liability insurance when insured and joint-and-several liability with insured become the third party, while specific judgment in individual case to estimate if the co-insured should be exercised in three different levels.The aim of the fifth chapter is to explore the problems that can arise with regard to how to deal with coordination of Insurer’s subrogation and Insured’s claim. There are three mode for payment priority between the insurer and the insured, including made-whole doctrine, insurer-whole doctrine, and pro-rata theory. Arrangement of repayment order is not a simple selection of rules, but the operation of complex systems. Within the framework created by the principle of indemnity, the made-whole doctrine is still the optimal solution; however, there may be situations in which the made-whole doctrine must be rejected or modified in light of legal or regulatory requirements or strict interpretation. Besides, there are some issues which need special treatment, such as burden of recovery cost and attribution of profits in subrogation. The insured is under an equitable duty not to prejudice or compromise the insurer’s right of subrogation. The behaviors of abandoning rights made by the insured in different periods may have different impact on the insurance subrogation right. This question is mainly analyzed from the following four stages:that is, abandonment of right prior to the execution of insurance contract; abandonment of right after the execution of insurance contract but prior to the occurrence of insurance event; abandonment of right after the occurrence of insurance event but prior to the payment of insurance compensation and abandonment of right after the payment of insurance compensation.