On The Judgment Of Causation In Insurance Law Of China

With the development of economy，insurance is becoming the main way of riskdistribution. Insurance plays an important role in socioeconomic development andsocial stability. In the practice of insurance，insurers assume liability depends onwhether the loss is caused by the insured risk. Determination of causation is needed.The determination of causation is crucial for the realization of the purpose ofinsurance and insurance law, for balance of interests of all parties in insurancebusiness activities. Due to the lack of principles and rules about causation ininsurance law of our country, combined with the complexity of the causation itself, itis very difficult for judges to identify the causation. Different judges adopt differentstandards. Some judges even use reasoning logic of causation in tort law to deal withinsurance disputes. It is hard to expect judgments of causation in insurance disputes,because different courts may have different judgments for the same type of cases.There are three theories for determining causality in insurance law theory of ourcountry, including proximate cause theory, adequate cause theory and proportioncause theory. Views on the causation in insurance law focus on proximate causetheory in academia of our country. Scholars commit themselves to explore standardsof causation in insurance law with proximate cause theory. Proportion cause theory isa new theory. Scholars and judges advocate applying proportion cause theory in caseof that the loss is caused by several reasons. No matter which theory judges apply,they use the same logical reasoning, fact judgments and value judgment, in actualcases. However, the target of logical reasoning is different, if the judge appliesdifferent theories. The judge needs to determine whether the loss is caused by theunderwriting risk according to the traditional theory; the judge needs to determine therole of underwriting risk for the loss according to proportion cause theory.The principle of causation in insurance law of our country should mainly applyto the proximate cause theory supplemented with the proportion cause theory, basedon comparative study and empirical analysis. Insurers assume liability only for theloss caused by insured risk as proximate cause. Proximate cause continuously and naturally works, and leads to the loss. Proximate cause is the substantive, effectiveand decisive cause of the loss. We should recognize the effectiveness of the exclusionclause to ensure that the insurer is not liable for the loss caused by exclusion. But weneed to prevent the insurer from using the exclusion clause to avoid responsibility.Insurance law should refer to doctrine of reasonable expectation as the supplement todoctrine of unfavorable explanation for identifying the effectiveness of exclusionclause in order to protect the interests of the insured and the beneficiary and preventviolation of fairness and justice caused by exclusion clause. When the loss caused bythe underwriting risk and declined risk together, the court may determine the insurerindemnify the loss pro rata according to the role of the underwriting risk to protect theinterests of insurance consumers. The court is forbidden to use proportion causeprinciple to reduce or remit insurer’s payment. The court should rely on judicialauthentication for the reasonable results in determining the role of the underwritingrisk to limit the discretion of judges.