The Comparative Analysis Of Insurer's Undue Settlement Behavior Of Claim

The claim settlement issue of the insurer is a very disturbing problem in the insurance industry.As an important element of social life,its influence is trans-industrial.It is been a long time before people pay attention to insurer's settlement problem.The insurer's improper settlement behavior makes the insured stuck in a terrible condition.Even in the property insurance,the insured may suffered from insurer's improper behavior and the loss continues to expand,but usually the insured can't get enough reimburse from the insurer.The fundamental reason of the insurer's settlement issue lies in the conflict between delaying payment of the insurer for economy benefit and the insured demand of reimburse to stop losses.The conflict between the insurer and the insured is obviously imposed a negative influence to the society.Most insurance cases of the court are about the insurer's payment issue,too.Policymakers should really put emphasis on insurer's settlement problems.In the countries which the insurance industry is developed very well,the legislature department has already notice this issue and setup a system to regulate insurer's undue settlement issues.There are mainly two methods.The first one is the bad faith tort.In the 50 s of the last century,America has offered a solution of insurer's bad faith tort to handle the problems above.After more than 50 years of development,the insurer's bad faith tort has been improved a lot.It is accepted in theory andpractice.Many cases show that the insurer's bad faith tort is very effective in America.After more than half centuries of development,it has already formed a completed theory system and owned a solid practical basis.The second method is a traditional way,solving this problem through the theory of liability for breaching contract.It is very typical in the German and the France legal system.Both of them have innovations in the punitive interest rates.Besides,UK put lots of emphasis on this issue,too.They have built a late payment system in the basis of learning insurance bad faith tort and other European countries experiences.In China,the discussing about how to built a system to regulate the insurer's settlement behavior never stooped.The phenomenon of insurer undue claim settlement issues are very serious and causing the increasing law suit and the chaos of insurance market.So far the problem hasn't been solved.The policymaker didn't pay enough attention,too.From the perspective of legislation,PRI and PRC can't provide sufficient protection to the insured rights.The regulation to the insurer's behavior is not strict.The insurer controls the period time of claim settlement,so the insured are in very passive position.The undue claim settlement behavior violates the principle of good faith and fair dealing.It is very necessary to establish a system to regulate the insurer's settlement behavior in China.From the perspective of law enforcement,the number of claim settlement case is increasing,the insured couldn't gain a proper reimburse.In Chinese legal system,it is hard for the insured to get the reimburse of mental loss no matter they taking the legal action of breaching the contract or tort.If the suit of breaching the contract was brought,the remedy would be very limited,there is no chance for them to ask for compensation of mental loss.If the suit of tort was brought,it would be very hard for the insured to improve the intention of the insurers.In fact,the property insurance contract is not directly related to personal issue,like human life.So the the most proper solution is to file a suit of breaching the contract,but the traditional concept of contract did not support the request for compensation of mental loss.Although the discussion of allowing request for compensation of mental loss has lasted for a long time.Still it is uncertain that whether the policymaker would accept this concept.So to maintain the judiciaryauthority,the issue of regulating the insurer's behavior can't be ignored.From the perspective of insurance practice,the insurer's bad faith behavior like a harsh punch to the industry.The spirit of contract is the soul of market economy,is the basis of society's faith system.The insurer's improper behavior is immoral and illegal.Once the insured file a suit,the insurers could face not only the loss of money,but also the loss of good business reputation.So establishing a system to regulate the insurer's settlement behavior in China moves the hinder to the healthy development of insurance industry.All in all,it owns a great significance to studying the establishment of insurer's settlement behavior regulation system.The thesis is divided into five parts based on this issue:The first part is to explain the insurer's improper claim settlement behavior,analyzing the pattern,background and present condition of their behavior.Some country has already offered efficient solutions to solve the problem of insurer's bad faith.One of the most important part of this article is to compare and analyze these different solutions.The settlement problem and the system to regulate the problem didn't appear suddenly,they are developed during the development of insurance industry and the problem solving process.There are mainly two methods to solve the problem.The first one is the bad faith tort.America has offered a solution of insurer's bad faith tort to handle the problems.The system is special design for insurer's bad faith problems.It is accepted in theory and practice.Many cases show that the insurer's bad faith tort is very effective in America.The second method is traditional way,solving this problem through the theory of liability for breaching contract.Most of countries follows the traditional way.It is very typical in the German and the France legal system.Both of them have innovations in the punitive interest rates.Besides,UK put lots of emphasis on this issue,too.They have built a late payment system in the basis of learning insurance bad faith tort and other European countries experiences.It is also belongs to the way of liability for breaching contract.The second part is introducing and analyzing the identification problem of insurer's bad faith of some Europe countries and American.Especially the uniquenessof tort liabilities of insurer's bad faith in America.There are three different standards to identify whether the insurer's settlement behavior is improper: subjective standard,objective standard and dual standard.Although different states may have different attitude towards this problem,but they are in the same direction,supporting the tort liabilities of the insurer's bad faith.The breaching of contract behavior put emphasis on the exact behavior on insurer.“The Delay Payment” is very new in the UK,there is no typical cases to explain the details of this regulation on insurer's payment.But there are many possibilities and worth to looking forward to.The standard of insurer's delay of payment has been set up,too.German and French are traditional continental law counties.They are very conservative in insurer's claim payment issues.The third part illustrates and analyzes the remedies for the insured,including the monetary loss,mental loss and punitive measures.The monetary loss contains the direct loss and indirect loss.Under the circumstances of breaching the law,there are exceptions that the court support the plaintiff's request for mental loss,such as the UK and the France.So it is practicable to ask for mental loss in the suit of breaching contract.Apart from that,German and France offer an punitive interest to provide insured remedy as much as possible.America is very bold when facing the remedy problem,protecting the insured with any possible solution,even including punitive measures.In the condition of strict protection of the insured,the insurer usually will excuse their misbehavior with different kinds of reasons,considering they should not undertake such serious responsibilities.The content of the forth part,the defenses of the insurer.Whether the defense can be accepted by the court or not,is not depending on whether the the reason can be judged as disclaimer.Under the circumstances of insurance bad faith tort,the uncontrolled reason that causing unreasonable settlement behavior cannot be a disclaimer in America.The uncontrolled reason that causing unreasonable settlement behavior,such risk shall not be a burden to the insured except that the reason is caused by the insured.If the insured cannot provide the information to the insurer in time or try to have insurance bilk,then the insured need to undertake the extra losses.But UK's insurance law may support that as a defense towards the suit.So in whichrisk that the insured should undertake,decides the defense can be accepted or not.The last and also the most important part,is a vision of some possible solutions to Chinese insurer's bad faith problems.There are advantages and disadvantages in these four counties solution.The solution should be established in Chinese legal system,taking in some experience and concepts from other countries,including how to identify a behavior as bad faith and how to make a considerate remedy plan for the insured.The plan should consider providing enough remedy for the insured,fitting in Chinese legal system,at the same time also should considering the protection of the development of domestic insurance industry.As far as domestic legal system,the insured could only protect themselves through a tort action.But the insured would face the problem of heavy burden of proof.So solving the problem of insurer's improper claim settlement from the perspective of tort,should begin with solving the problem of insured' burden of proof.