Study On The Exercise Conditions Of The Third-party Direct Claims In Liability Insurance

On the basis of reserving Paragraphs 1 and 4,Article 65 of the Insurance Law revised in 2009 added Paragraphs 2 and 3,among which Paragraph 2 established the conditional third-party direct claims in liability insurance in China.Unlike the unconditional third-party direct claims provided by special laws,Paragraph 2 of Article 65 in Insurance Law provides two exercise conditions for the third-party direct claims: “the insured’s liability for indemnity to the third party has been determined” and “the insured goes slow to make a request”.When amending the law,this paragraph once faced with a lot of controversy;however,after amending the law,there is still disagreement on how to interpret this paragraph.For this reason,this thesis studies the exercise conditions of the third-party direct claims.By analyzing and learning from the experience of extraterritorial legislation,as well as combining relevant basic theories,this thesis first expands analysis based on the interpretation theory,and then discuss issues based on the legislation theory.In addition to the introduction and conclusion,this thesis consists of four chapters:Chapter 1 is the overview on the third-party direct claims in liability insurance.This chapter analyzes the theoretical foundation of the third-party direct claims,including its jurisprudence,nature and types,and recalls the process of establishing the third-party direct claims in China.Since modern legislation has broken through the Principle of Privity of Contract,there should be no theoretical obstacles when the law provides the third-party direct claims.In respect of the nature of the third-party direct claims,this thesis supports the Statutory Coexisting Debt Assumption Theory and Untruthful Joint and Several Debt Theory,which serves as the foundation of analysis below.The third-party direct claims could be divided into different types depending on the existence or not of exercise conditions or defense rights.Chapter 2 is the extraterritorial study on exercise conditions of the third-party direct claims in liability insurance.There are three extraterritorial legislative modes: unconditional third-party direct claims(such as Wisconsin State in US and South Korea),conditional third-party direct claims(such as New York State in US,Taiwan,Germany and UK)and no general provisions on the third-party direct claims(such as Japan).Generally speaking,the third party could directly request the insurer to pay insurance money only when the liability relationship has been determined;meanwhile,the situation for exercising the third-party direct claims is normally that the insured falls into bankruptcy or liquidation.Nevertheless,in respect of how to identify determined liability relationship,the standards in different countries and regions differ;actually,Germany and UK do not require determined liability relationship.Besides,Germany further distinguishes between compulsory liability insurance and any liability insurance,providing different exercise conditions for the third-party direct claims in the two types of insurances.Chapter 3 is the interpretation on the exercise conditions of the third-party direct claims in liability insurance in China.This thesis points out that Paragraph 1 of Article 65 is merely a declaratory statute identifying two possible claims basis for the third party to exercise direct claims,namely provisions of the law and terms of the contract.Paragraph 2 falls within the denotation of “law” referred by Paragraph 1.In Paragraph 2,Sentence 1 provides the legal situation for the insurer to directly indemnify the third party,while Sentence 2 provides the exercise conditions of the third-party direct claims and serves as the authority in general law for the third party to exercise direct claims based on the “law”.The two explicit exercise conditions shall be both subject to liberal interpretation.In addition,the third-party direct claims contain three implicit exercise conditions: “the insured is unable to make a request”,“the insured fails to pay any or enough damages” and “the request does not exceed the limitation of liability agreed in the insurance contract.”Chapter 4 is the improvement on the exercise conditions of the third-party direct claims in liability insurance in China.This thesis argues that there is no need to distinguish between compulsory liability insurance and any liability insurance and to provide different exercise conditions for the third-party direct claims in the two types of insurances.This thesis recommends that when amending the Insurance Law:(1)delete Paragraph 1 of Article 65 in Insurance Law;(2)revise the exercise condition “the insured’s liability for indemnity has been determined” into “the insured bears liability for indemnity to the third party”;(3)refine the exercise condition “the insured goes slow to make a request” by adding the situation that “the insured is unable to make a request”,defining “goes slow to make a request” and introducing the credit records;(4)provide third party’s right to get access to policy information;(5)specify insurer’s defense right against the third party;and(6)specify the limitation of action in respect of the third-party direct claims.