A study on the suspension and reinstatement system of insurance contracts

• Main Authors: Peng,Ingwei, 彭英偉
• Other Authors: Lin, Frank Hsin Fa
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/47701005243875688751

碩士 === 國立政治大學 === 法學院碩士在職專班 === 97 === The suspension and reinstatement system of insurance contracts is a specific system different from other civil contracts. Its purpose is to prevent proposers, who forget to or are unable to pay premium other than the initial premium, from being terminated of insurance contracts by insurers. The proposer may reinstate the original policy within the time period for applying for reinstatement and when conforming to certain terms. Regarding the terms of reinstatement, the contents are varied among countries but usually include the following items: (1) a reinstatement application; (2) evidence of insurability; (3) prepayment of any overdue premium; and (4) approval of the reinstatement application. Before the Amendment to the Insurance Act in 2007, the terms of reinstatement were stipulated differently among the Insurance Act, the Enforcement Rules for the Insurance Act and the Model Provisions for life Insurance Policies. As a result, there were serious debates of schools, while different judgments delivered by courts of law for similar cases. Thus disputes were continuously happened in terms of insurance practices. Resolving the disorderly phenomenon in the insurance market, Article 116 of the Insurance Act was amended on 18 July 2007 as the following: “A suspended insurance contract shall be reinstated after the premium, the interest stipulated in the insurance contract, and other expenses are paid, provided that such payment is made within six months from the date of suspension. Where the proposer applies for reinstatement more than six months after the date of suspension, the insurer may require that the proposer furnish proof of insurability for the insured, and the insurer may not refuse reinstatement unless the insured's degree of risk has undergone a change that is sufficiently material as to justify refusal to insure”. The amended Act contributes the rebuilding of the order of the insurance market. However, it also produces some new problems. For example, the meaning and scope of the evidence of insurability, how to deal with the reinstatement when the proposer providing lapsed evidence of insurability, the approval and underwriting when the insured's degree of risk has undergone a change that is sufficiently material as to justify refusal to insure, whether the insurer has the right to require some conditions for its approval of reinstatement, and how to recognize the effective time of reinstatement. All these problems still remain unsolved. The study widely collects and compares different countries’ legislative systems, gets together the important points in dispute, analyzes the amended Act’s impacts on the insurance market, and presents opinions and recommendations, which could be reference for amending the Act in the future, on these new problems caused by the amended Act.