The Third Party Liability Insurance Legislative Research

Liability insurance is an important part of property insurance; its main role is toensure that the third party could be able to receive timely and effective economiccompensation in the body or property damage. Article65and Article66of the new"Insurance Law" explicit provisions on the liability insurance system in China, itclearly defines that the third victim has a direct claim and sets up a system about theinsurance money to stop payment and so on. This is a kind of legislative progress.In-depth study of third party liability insurance law, first of all, that should be clearabout the basic theory of liability insurance, including connotation and historicalevolution of liability insurance, the connotation and domestic and foreign legislationof the direct claim of a third party, and so on. Liability insurance refers to the liabilityto the third party of the insured which should be an insurance sign according to thelaw. It produces in European and American countries in the early19th century, andhad experienced more than100years. Looking at the international insurance market,the United States and Japan’s liability insurance is most typical. The direct claim of athird party refers the third party to request the insurer paying direct compensationwithin the scope of the rights provided when the statutory conditions are met.Regarding the direct claim of a third party, there are four main theories: The legalright theory, the original acquisition theory, the right shifting theory and theresponsibility shirking theory. Although the focuses of those research are different,but there is certainly a direct claim of a third victim.Secondly, it is necessary to analyze the pros and cons of our liability insurance lawsand regulations. Specifically, the law stipulates the subject and conditions of the directclaim of a third party, setting up a system to limit the insured to receive the insurancemoney, pointing out the commitment of appropriate liability insurance costs, trulyproviding the substantive law basis for the third party to exercise the right, improvingthe efficiency of a liability insurance claim, promoting the further development of thetheory of liability insurance. But they still cause much controversy when the law isapplied in practice, there are some drawbacks. First of all, it is not exhaustive todeterminate the compensation responsibility and the compensation amount of the direct request of a third party, it lacks of specific standards to find the insured’s"failure to request" behavior, and ignores the right of the insurer to give effect to thethird party. Second, in other provisions relating to liability insurance, it lacks ofstandards of compensation for the insured to the third party, reviewing provisions ofthe obligations of the insurer is not comprehensive, and defining the scope ofnecessary and reasonable costs are too general. Regarding this kind of insufficiency,our country still did not have the law to make the regulations at present, also noauthorities explained, therefore the law needs for in-depth research and systemspecification. The liability insurance legislation consummates mainly aims at thedirect claim of a third party system and related provisions, it is the need of lawenforcements correctly, the need of realization social management function and theneed of sounding liability insurance legal framework. Therefore our country shouldcarry out the liability insurance law legislation or the explanation work as soon aspossible.After the analysis of the liability insurance’s rationality, imperfection andimprovement of necessity, and as is the question of how to improve and perfect it."Liability determined" has certainly a variety of liability to determine the way, eitherusing court decisions and arbitral awards, or using the agreement which achieve toundertake the responsibility between the insurer, the insured and the third party; butthe specific amount of compensation should be determined by the insurer. Inidentifying the insured "failure to request" behavior, it can relies on the time standardand the behavior standard, First, the agreed notice period required by law or liabilityinsurance contracts and claims the time limit for the criterion, the second is toestablish " direct claim-urge claim-direct indemnity" system among a third party.Discussion on the insurer’s right of defense, it is also necessary to distinguish thedifferent nature of liability insurance the insurer to a third party right of defense, andthe concrete discrimination for does not attach contradicts the matter and attachescontradicts the matter two kind of types. The difference is suitable the differentstipulation. In addition to the direct claim of a third party, the other provisions need toconsummate. In particular, other provisions clearly insure obligations of fullcompensation to third parties for the injured, the insurers must review obligations tothe insured for payment and assume the joint and several liabilities, the law shoulddefine the specific scope of necessary and reasonable expenses clearly.