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2021

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Lawyer Sheng Bang from the Legal System | Huang Jieling: Identification and Defense of Disclaimers in Personal Insurance Contract Disputes: From the Perspective of the Insured

In disputes over personal insurance contracts, the common reason for insurance companies to refuse compensation is the existence of exemption reasons. The exemption clause in the insurance contract text is a typical exemption clause that is easy to identify. Non typical and difficult to identify exemption clauses include several types: agreements on deductible amount, deductible ratio, and proportional compensation; The definition of the concept in insurance clauses narrows the insurer's coverage and expands the insurer's exemption scope; Waiting period, etc.


abstract

In disputes over personal insurance contracts, the common reason for insurance companies to refuse compensation is the existence of exemption reasons. The exemption clause in the insurance contract text is a typical exemption clause that is easy to identify. Non typical and difficult to identify exemption clauses include several types: agreements on deductible amount, deductible ratio, and proportional compensation; The definition of the concept in insurance clauses narrows the insurer's coverage and expands the insurer's exemption scope; Waiting period, etc. The defense against exemption clauses can be considered based on the differences in case facts, including the obligation to provide insurance clauses, the performance of instructions and explanations, the effectiveness of exemption clauses, and whether the content of exemption clauses is clearly agreed without ambiguity.

 

Keywords: Personal Insurance Contract Dispute Exemption Reason Insurance Clause

 

Chinese Library Classification Number: D9

 

If an insurance company refuses to claim compensation in a case of personal insurance contract dispute, the insured party first needs to identify the type and legal basis of the insurer's refusal to claim. There are several common types of personal insurance contract refusal by insurance companies: 1. Non insurance liability scope (involving the definition of the cause of insured accidents); 2. Insurance accidents occur during the waiting period; 3. Accidents falling within the scope of deductible liability or with exemption reasons; 4. There are situations beyond the scope of policy protection, and the policyholder or insured fails to truthfully inform them; 5. Other situations, such as policy invalidation, incomplete claim information, etc. Among these situations, the third one is a typical situation where an insurer refuses to claim under an exemption clause. Although some other projects may appear to be in situations where claims are refused based on agreements other than exemption clauses, they can also be considered as exemption clauses under certain circumstances and conditions.

 

1、 Identification of exemption clauses

An exemption clause is a clause in an insurance contract that exempts the insurer from liability. The insurer can set up an exemption situation as an exemption clause on the application form, insurance policy, insurance terms, and other insurance certificates. The typical setting area for exemption clauses is in the special provisions of the application form and insurance policy, as well as in the insurance clauses. Typical expressions of exemption clauses include "the insurer is not responsible for compensating for losses caused by... property/situation", "the insurer is not responsible for compensating for any of the following situations", "the insurer is not responsible for compensating for losses, expenses, and liabilities caused by the following reasons", etc. Typical disclaimer clauses are easy to identify, and some insurance contracts without typical disclaimer wording may belong to other situations of refusal to claim, which may be atypical disclaimer clauses. Below are several atypical disclaimers:

 

1. Agreement on deductible, deductible, and proportional compensation

The content of deductible, deductible, and proportional compensation in personal insurance often appears in the payment agreement of medical expenses. Article 9 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Insurance Law of the People's Republic of China (2): "The clauses in the format contract text provided by the insurer that exempt or reduce the insurer's liability, such as the liability exemption clause, deductible amount, deductible rate, proportional compensation or payment, can be recognized as the" exemption clause from the insurer's liability "stipulated in Article 17 (2) of the Insurance Law. According to this provision, the relevant deductible amount The provisions on exemption rates and proportional compensation are all exemption clauses.

 

2. Definition of concepts

In daily life, clinical medical cognition, or legal standards, people have a relatively consistent understanding and interpretation of the causes of insurance accidents, such as "illness", "major illness", "first time illness", "stroke", "sudden death", etc. However, the interpretation of certain concepts in insurance clauses is sometimes inconsistent with people's usual understanding.

 

In the case of insurance contract dispute between Wang and an insurance company, Wang purchased Corning Life Insurance from the insurance company. Article 4 of the insurance terms is about the insurer's insurance liability, which stipulates that during the validity period of this contract, the company shall bear the following insurance liabilities: 1. When the insured first occurs 180 days after the effective date of this contract and is diagnosed with a major disease by a medical institution designated or recognized by the company, Our company shall pay the major disease insurance benefits at twice the amount of the disease insurance... If the payment of the major disease insurance benefits occurs during the payment period, from the date of payment, the subsequent insurance premiums shall be waived, and this contract shall continue to be valid. Regarding what constitutes a major disease, Article 22 of the clause stipulates that a major disease refers to one of the following diseases or surgeries: (1) heart disease; (2) Coronary artery bypass surgery; (3) 10 diseases or surgeries such as stroke. Regarding what stroke is, the annotation states that stroke is a sudden disease that leads to cerebral vascular bleeding, embolism, and infarction, resulting in permanent neurological dysfunction. The so-called permanent neurological dysfunction refers to: (1) vegetative state; (2) Complete loss of skills below one limb; (3) Individuals with motor or sensory impairments below two limbs who are unable to take care of their daily lives on their own; (4) Loss of speech or chewing function. In 2004, Wang suffered from a sudden consciousness disorder accompanied by left limb movement disorder. He spent over 80000 yuan on medical expenses for hospitalization and treatment. After discharge, he applied to the insurance company for compensation, but the insurance company refused to claim compensation on the grounds of exemption from liability.

 

① Compiled by the Second Division of Civil Trial of the Supreme People's Court Supreme People's Court on Judicial Interpretation of Insurance Law (II) Understanding and Application [M]. Beijing: People's Court Press, 2015:237-238

 

The court held that the insurance clauses limit the scope of "major diseases" to 10, which is much smaller than the scope of major diseases understood by ordinary people. This interpretation is a reduction of the scope of major diseases covered by the insurer in Article 4, that is, an expansion of the insurer's exemption scope. The above provisions provide a definition of stroke, but the symptoms of stroke described are no longer commonly understood as clinical stroke, but rather the sequelae of stroke. As commonly understood, stroke in clinical medicine can be roughly divided into three categories: cerebral infarction, cerebral hemorrhage, and subarachnoid hemorrhage. Therefore, the stroke mentioned in the annotation is also a reduction in the scope of stroke understood by ordinary people, that is, an expansion of the scope of exemption for insurers. Therefore, the interpretation of Article 22 of this clause is a narrowing of the scope of Article 4 "Insurance Liability" and an expansion of the scope of Article 5 "Liability Exemption", which is essentially a limitation clause. At the same time, the court held that as the provider of the standard contract, the insurance company should provide special explanations and explanations to the policyholder regarding the specific content of the change in liability, as it did not explicitly list the content under Article 4 "Insurance Liability" and Article 5 "Liability Exemption". Based on this, the court found that the insurance company has not fulfilled the obligation to explain the exemption clause and cannot refuse compensation on this basis.

 

From the above cases, it can be seen that the definition of concepts in insurance contracts, such as narrowing the scope of insurance coverage by the insurer and expanding the scope of the insurer's exemption, may be recognized as exemption clauses. If the insurer refuses to claim compensation based on this, it is necessary to fulfill the legal obligation of the exemption clause.

 

3. Waiting period

The waiting period is commonly set by insurance companies to avoid situations such as serious illness insurance and accident insurance. The waiting period refers to the designated period during which an insurance contract takes effect, even if an insurance accident occurs, the beneficiary cannot receive insurance compensation. This period is called the waiting period.

 

In the insurance contract dispute between Xiong and an insurance company (case number: (2020) Yue 01 Min Zhong 17303), The provisions of Article 5 of the insurance clauses of an insurance company regarding insurance liability are as follows: "During the insurance period of this insurance contract, the insured shall die during the insurance period due to the first illness or cause the" Table of Total Disability Degree of Life Insurance "attached to this insurance contract within 90 days from the effective date of this insurance contract or after the waiting period stipulated in the policy (the renewal is not limited by this waiting period) For those with one of the listed degrees of total disability, the insurer shall pay disease death insurance benefits or disease total disability insurance benefits. Among them, the agreement on "the insured shall wait for 90 days from the effective date of this insurance contract or after the waiting period stipulated in the policy" is the agreement on the waiting period. The court held that the agreement on the waiting period in the insurance contract essentially exempts the insurance company from liability for compensation within a certain period of time. Therefore, although this content does not appear in the insurance exemption clause, its nature still belongs to the exemption clause.

 

② Please refer to the "Opinions of this Court" section of the civil judgment in the case of Yue 01 Min Zhong 17303 in 2020.

 

In short, whether it belongs to an exemption clause should not be limited in the form of a clause, but should be judged by whether the content of the clause exempts the insurance company from its responsibility. However, identifying exemption clauses also needs to be determined based on legal provisions and the specific circumstances of the insurance contract. For example, Article 9 (2) of Judicial Interpretation 2 of the Insurance Law clearly stipulates that "the clause where the insurer has the right to terminate the contract due to the policyholder or the insured's violation of legal or contractual obligations does not belong to the 'exemption clause from the insurer's liability' stipulated in Article 17 (2) of the Insurance Law." At this time, the insurance company terminates the insurance contract accordingly, Refusal of the remaining value of the insurance premium for refusal of claim does not constitute refusal of claim under the exemption clause.

 

2、 Defense of Disclaimer Clause

 

1. Delivery of insurance contract texts such as insurance clauses, application forms, and insurance policies

The carrier of exemption clauses is insurance clauses, application forms, insurance policies, and other insurance contract texts. Article 17 of the Insurance Law stipulates the obligation of the insurer to remind and explain exemption clauses: When entering into an insurance contract, if the standard terms provided by the insurer are used, the application form provided by the insurer to the policyholder shall be accompanied by standard terms, and the insurer shall explain the content of the contract to the policyholder. For clauses in the insurance contract that exempt the insurer from liability, the insurer shall make sufficient reminders on the application form, insurance policy, or other insurance documents to draw the attention of the policyholder when entering into the contract, and provide written or Provide a clear explanation to the policyholder orally; If there is no prompt or clear explanation, the clause shall not have effect, and the primary prerequisite for the insurer to fulfill this obligation is undoubtedly the carrier for delivering the insurance clause to the policyholder and the insured. If the insurance contract is in paper form, the insurer shall deliver the insurance terms, application forms, and other materials in paper form before signing the insurance contract; If the insurance contract is an electronic version, the insurer shall proactively provide and display the application form and insurance terms to the policyholder during the insurance process.

 

In the electronic insurance process, the policyholder can only apply by clicking on similar content such as "I have confirmed and agreed to the insurance terms, insurance instructions". If the policyholder needs to click on the link of the insurance terms to display the content of the insurance terms, the insurer may be deemed as not actively providing or displaying the insurance terms. Article 17 of the Insurance Law stipulates that when an insurer enters into an insurance contract, it shall attach standard terms and bear a general obligation to explain all standard terms, and shall bear the obligation to remind and clearly explain the clauses exempting the insurer from liability. These statutory obligations are obligations that the insurer should actively fulfill, rather than arising passively based on the policyholder's request. The policyholder only needs to actively click on the insurance standard terms, which is actually provided by the insurer according to the policyholder's request. This does not comply with the provisions of Article 17 of the Insurance Law. Therefore, in the process of electronic insurance, if the insurance terms, special agreements, and other content containing exemption clauses are not actively displayed, the insurance is successful. In the lawsuit, the insured can claim that the insurer has not fulfilled its legal obligations and cannot be exempted based on the exemption clause if the insurer does not actively provide the insurance terms or exemption clauses as contract content.

 

2. Reminder and Interpretation of Insurance Terms and Performance of Obligations

Article 17 of the Insurance Law stipulates that if the exemption clause fails to fulfill the obligation of prompt and clear explanation, it shall not have legal effect. This is the most commonly cited basis for the insured to counter disclaimer clauses.

 

The obligation to remind and clarify is two different legal obligations. According to the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Insurance Law of the People's Republic of China (II), the obligation to provide a prompt is to "provide a prompt with words, fonts, symbols, or other obvious signs that are sufficient to attract the attention of the policyholder"; Clearly state that the obligation is to provide a written or oral explanation of the concept, content, and legal consequences of the terms to the policyholder that ordinary people can understand. The burden of proof for whether the insurer has fulfilled the obligation of prompt and explanation shall be borne by the insurer. If the policyholder signs, seals or confirms in other forms that the insurer has fulfilled the obligation of clear explanation on relevant documents, it shall be deemed that the insurer has fulfilled this obligation. If the insurer fails to fulfill the obligation of reminding and clearly stating the exemption clause according to the standards specified above, the exemption clause cannot be cited to refuse compensation.

 

Therefore, as mentioned earlier, if the insurer fails to fulfill the obligation of prompt and explanation, the concept and definition of insurance liability, as well as the provisions on deductible amount, deductible rate, and compensation ratio, which can be recognized as exemption clauses, shall not have legal effect in accordance with the law. In practice, the insured can attempt to propose deductible claims against the insurer in this direction.

 

3. Claim that the exemption clause is invalid

Article 19 of the Insurance Law stipulates: "The following clauses in an insurance contract concluded using the format terms provided by the insurer are invalid: (1) exempting the insurer from the obligations that should be assumed by the insurer in accordance with the law or increasing the liability of the policyholder and the insured; (2) excluding the rights enjoyed by the policyholder, the insured or the beneficiary in accordance with the law. This provision is about the invalidity of standard clauses, which partially overlaps with Article 17. When the exemption clause fails to fulfill the obligation of prompt or clear explanation, and there is a situation where the clause is invalid, the insured may simultaneously cite Article 17 and Article 19 for defense.

 

Give the following example:

The definition of sudden death in a certain insurance company's sudden death insurance is: 'Sudden death' refers to the sudden occurrence of acute symptoms, and the unfortunate death within 24 hours after the onset of the sudden symptoms directly or completely, and the direct cause of death cannot be determined. 'The World Health Organization's definition of sudden death is:' A patient who is usually healthy or appears to be healthy, and dies suddenly due to natural diseases within an unexpected short period of time, is called sudden death. '. Comparing two definitions, it can be seen that a certain insurance company limits the scope of sudden death causes to "those whose direct cause of death cannot be determined". Compared to the WHO definition of "sudden death due to natural diseases", it excludes the vast majority of sudden death situations. It can be said that the definition of sudden death by insurance companies has directly changed the original definition of sudden death. For such insurance clauses, the insured shall not only apply the insurer's obligation to explain and defend the exemption clause, but also, Article 17 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Insurance Law of the People's Republic of China (II) can also be applied: "If the insurer interprets non insurance terms in the insurance contract format terms provided by it in a professional sense, or if it is not in a professional sense but beneficial to the policyholder, insured or beneficiary, the people's court shall recognize it, According to Article 19 of the Insurance Law, the following clauses in an insurance contract concluded using the format terms provided by the insurer are invalid: (2) exclude the rights enjoyed by the policyholder, insured or beneficiary in accordance with the law "to defend and claim that the insurance company's definition of this concept is invalid.

 

4. The principle of favorable interpretation of insurance clauses for the insured

If there is ambiguity in the content of the deductible clause, it shall be interpreted in favor of the insured.

 

As stipulated in the following clauses regarding the insured's occupational change by an insurance company:

 

Article 5: Change of Occupation of the Insured

1、 When the insured changes their profession or type of work, the policyholder or insured shall notify the insurer in writing within 15 days.

 

2、 If the occupation or type of work changed by the insured falls within the scope of refusal of insurance according to the insurer's occupational classification, the insurer has the right to terminate this insurance contract after receiving the notice and refund the unexpired net insurance premium corresponding to the restored occupation or type of work on the date of receiving the notice. If the insured's changed profession or type of work can still be covered according to the insurer's occupational classification or is within the scope of refusal of insurance, but the insurer determines that it can continue to cover, the insurer shall calculate and refund the unexpired net insurance premium corresponding to the restored profession or type of work on the date of receiving the notice, and the policyholder shall pay the unexpired net insurance premium corresponding to the new profession or type of work calculated on the date of receiving the notice by the insurer.

 

3、 If the insured changes their profession or type of work and the risk increases according to the insurer's occupational classification, and an insurance accident occurs without notifying the insurer in accordance with this article, the insurer shall calculate and pay the insurance benefits based on the proportion of the original insurance premium paid to the corresponding insurance premium of the new profession or type of work. The occupation or type of work changed by the insured is within the scope of refusal of insurance according to the occupational classification of the insurer, and the insurer is not responsible for paying insurance benefits.

 

In the above clauses, if the insured changes their profession within the scope of refusal of insurance, the second paragraph stipulates that the insurer may or may not terminate the insurance contract; The third paragraph stipulates that if the occupational risk of the insurer's change of occupation increases (without limiting whether the change of occupation is within the scope of refusal) and an insurance accident occurs, the insurer shall calculate and pay the insurance benefits proportionally; But at the same time, if it is agreed that the change of occupation is within the scope of refusal of insurance, the insurer may refuse compensation.

 

The provisions of this clause are complex and contradictory. According to this clause, if the insured changes their profession and falls within the scope of refusal to insure, will the insurer terminate or not terminate the contract, and will they compensate proportionally or refuse to compensate? There is a contractual basis for making each choice, but at the same time it contradicts other provisions of the clause. According to Article 30 of the Insurance Law: "If an insurance contract is concluded using the standard terms provided by the insurer, and there is a dispute between the insurer and the policyholder, the insured or the beneficiary regarding the contract terms, it shall be interpreted in accordance with the usual understanding. If there are two or more interpretations of the contract terms, the people's court or arbitration institution shall provide an interpretation in favor of the insured and the beneficiary, In cases where there are multiple interpretations of the above exemption insurance clauses, the insured may choose the most favorable interpretation to defend the insurer's exemption clause.

 

In the case of disputes over personal insurance contracts, identifying whether the reasons for refusal of compensation belong to exemption clauses after the insurance company refuses to compensate is a prerequisite for the insured to summarize the factual basis, correctly apply legal provisions, and judge whether the insurer's refusal of compensation is legal and reasonable after the accident occurs. Insurance liability has the attribute of sharing social risks, therefore, compared to the parties to general contracts, the law imposes a heavier obligation on the insurer. In this context, if the insured party is able to identify the exemption clause and accurately apply the defense reasons and legal basis when encountering a refusal of compensation, it can effectively use the law to protect its legitimate rights and interests.

 

Reference Catalogue

[1] Compiled by the Second Division of Civil Trial of the Supreme People's Court Supreme People's Court on Judicial Interpretation of Insurance Law (II) Understanding and Application [M]. Beijing: People's Court Press, 2015

[2] Compiled by the Second Division of Civil Trial of the Supreme People's Court Supreme People's Court on Judicial Interpretation of Insurance Law (III) Understanding and Application [M]. Beijing: People's Court Press, 2015

[3] Compiled by the Second Division of Civil Trial of the Supreme People's Court Supreme People's Court on Judicial Interpretation of Insurance Law (IV): Understanding and Application [M]. Beijing: People's Court Press, 2018

[4] Wang Jing Integration of Judicial Perspectives on Property Insurance Cases [M]. Beijing: Law Press, 2016

[5] Du Aiwu Analysis of Property Insurance Claims and Recovery Cases [M]. Beijing: China Legal Publishing House, 2017

[6] Wang Linqing, Yang Xinzhong Essentials and Rules Application of Insurance Contract Dispute Adjudication [M]. Beijing: Peking University Press, 2016