Research On The Marine Insurer's Defense Upon Breach Of Disclosure Obligation

The law of marine insurance contract imposes on the insured a mandatory duty of disclosing all relevant information to the insurer, hence entitles the insurer to refuse the insured' s claim through the defense built upon the breach of duty of disclosure. The significance of the system is to protect the insurer from undertaking the risk without thorough understanding of the material facts concerning the insured object due to the fraud or negligence of the insured so as to adjust the imbalance of position and rights of the involved parties resulting from the information asymmetry. Nevertheless during the development of marine insurance, with the scientific and technological advancement the insurer dramatically improves his ability of obtaining information and controlling risks, which contributes to the reasonable rebalanced position of the parties on the one hand, whereas the insurer, holding the advantage of his professional knowledge and experience, abuses the defense upon non-disclosure and misrepresentation to rescind the contract for the purpose of relieving from the payment on the other hand. The existing situation makes the disclosure system deviating from its original function as the interests readjustment mechanism to the excuse of malicious defense by the insurer, which runs against the value and the principle of utmost good faith. Therefore, it-is necessary and importantto conduct the research of the defense system of the insurer, to guide the insurer to raise reasonable and well-meant defense, and to advise the insured how to fulfill his duty of disclosure rightfully so as to effectively avoid the consequence that the insurer refuses to pay as well as how to seek for legal support against the defense of the insurer.This essay mainly works upon the Marine Insurance Act 1906 and the classic cases of UK, and learns from the different legislation of other common law system countries and the civil law system countries, as a comparison with the corresponding laws in our country, to dissertate and analyze the defense system of non-disclosure in the following four chapters:The first chapter is to demonstrate that the theoretical foundation of disclosure is the principle of utmost good faith, with the discussion of the practicing theories, combining retrospection of the history of disclosure system and analysis of the special quality of marine insurance contract.The second chapter presents a comprehensive statement of disclosure system, analyzes the concept of disclosure, illustrates the concept and classification of representation and concludes with the summarization of the rules concerning the exemption from duty of disclosure.The third chapter, functioning as the core part, expounds the tests, consisting in the objective test of "material circumstance" and the subject test of "knows or ought to know" rule, for judging whether the defense upon the breach of disclosure duty stands; the dissertation of the former is based on the discussion of the "prudent insurer" test, the degree of "materiality" through the illustration of the insurance legislation as well as the case analysis of different countries and the "actual inducement" doctrine as a supplementary tool to the "material circumstance" test.The final chapter concludes with the exploration of remedies for the breach of disclosure doty of the insured.In this essay, the author uses the research methods as the review and examination of history, the comparison method, the case analysis and the semantic analysis, and tries to form an initial conception for building up the defense system upon the breach of disclosure duty in our country.