What is a contract?
The abbreviation of “special agreement” generally refers to the agreement between the insurer and the insurance client (including the policyholder, the insured, and the beneficiary) through endorsement, endorsement, supplementary agreement in the insurance application form, or signing a supplementary agreement separately. Changes, supplements, etc. to the content of the insurance clauses approved or filed by the institution.
Does specialization lead to a risk of non-compliance?
According to the relevant provisions of the “Insurance Law”, “Administrative Measures for Insurance Clauses and Premium Rates of Property Insurance Companies” and “Administrative Measures for Insurance Clauses and Premium Rates of Personal Insurance Companies”, whether it is a property insurance clause or a personal insurance clause, it must be approved by the State Council. Approval or filing by the supervisory and management agency, and changes to the approved or filed insurance clauses must be resubmitted for approval or filing.
If an insurance company changes the insurance clauses that have been reported or approved without authorization, it will constitute a failure to use the approved or filed insurance clauses in accordance with the regulations. The company and relevant responsible personnel will face the risk of administrative punishment at the same time.
However, if the insurance clauses that have been filed or approved are not changed, but supplementary agreement is made on the matters that are not stipulated in the insurance clauses that have been filed or approved, is it against the regulations?
Article 18 of the “Administrative Measures for Insurance Clauses and Premium Rates of Property Insurance Companies” (Order No. 10, 2021 of the China Banking and Insurance Regulatory Commission) stipulates: “If a property insurance company modifies the approved or filed insurance clauses or premium rates , should be resubmitted for approval or filing in accordance with these Measures. …”
Article 35 of the “Administrative Measures for Insurance Clauses and Premium Rates of Personal Insurance Companies” (Order No. 3, 2015 of the China Insurance Regulatory Commission) stipulates: If the insurance liability, type of insurance or pricing method is involved, the insurance clauses and premium rates shall be resubmitted for approval or filing.” Article 36 stipulates: “An insurance company shall change the insurance clauses and premium rates that have been approved or filed. If the insurance liability, type of insurance and pricing method are not changed, it shall file with the China Insurance Regulatory Commission within 10 days from the date of the change, and submit the following materials: …”
From the perspective of the meaning of the above provisions, it is only necessary to re-submit or approve if it constitutes a change to the insurance clause or the insurance premium rate. What is meant by change, from the perspective of Chinese vocabulary, should refer to change and change, that is to say, if there is no change or change to the insurance clauses that have been filed or approved, but only supplementary agreement on matters that are not stipulated in the insurance clauses, then, It can be considered that it is not a change to the insurance terms, and there is no need to file or approve again. However, it needs to be emphasized that the “supplementary agreement” here cannot constitute a substantial change or change to the content of the insurance clauses that have been filed or approved. Otherwise, it will still constitute a change to the insurance clauses that have been filed or approved, and a new report is still required. preparation or approval.
From the perspective of judicial practice, the above viewpoint has also been supported by some courts. In the Administrative Judgment (2023) Yue 19 Xing Zhong No. 354 issued by the Intermediate People’s Court of Dongguan City, Guangdong Province, the court held that, according to the second paragraph of Article 18 of the “Insurance Law of the People’s Republic of China”: “The policyholder and the insurer may agree to According to the provisions of “other matters related to insurance”, the policyholder and the insurer have the right to agree on the relevant matters of the insurance contract. The iron house and simple shed and the property placed in the above-mentioned buildings are not covered by the insurance liability of this policy (except for steel structure buildings designed and constructed according to national standards and submitted for construction approval). There is nothing wrong with it, and, The above-mentioned special agreed terms are clarification of the underwriting subject matter, and have not changed the content of the filing terms.
How effective is the contract?
To determine whether a special agreement is valid, it is essentially necessary to determine whether there are circumstances stipulated in the Civil Code and the Insurance Law that lead to the invalidation of relevant civil juristic acts or contracts. As for the doubts about the effectiveness of the special contract, the main reason is that the “Insurance Law” clearly stipulates that the insurance clauses need to be approved or filed by the insurance regulatory agency of the State Council. Violation of the mandatory provisions of laws and regulations, which will lead to the risk of the special contract being deemed invalid.
Based on the above, the current practice is mainly divided into the following two situations:
For the insurance clauses that need to be filed, is the special agreement to change the insurance clauses valid without filing?
Conclusion: From the point of view of judicial practice, for the insurance clauses that need to be filed, the effectiveness of the special agreement will not be affected if the special contract that changes the insurance clause is not filed again.
Case 1: An insurance contract dispute between the Jinan branch of a property insurance company and Zhang Jiyong and Meng Fanhua
Basic case:
Zhang Jiyong and Meng Fanhua (appellee and plaintiff in the original trial) insured XXX through the Xinshi Town Primary School in Jiyang County where XXX attended, and the insurer was Jinan Branch of XX Property Insurance (the appellant and the defendant in the original trial) . After a traffic accident occurred, the Jiyang County Traffic Police Brigade determined that XXX and Li Wenxiang were equally responsible for the accident, and Zhang Daqing was not responsible. Article 2.2 Exemption of Liability, 2.2.2 Period Exclusions, Item (4) of the Student and Child Accident Insurance Clauses (2009 Edition) submitted by Zhang Jiyong and Meng Fanhua stipulates: “The insured drives after drinking and does not have a valid driver’s license (see 6.8 for interpretation) During the period of driving or driving a motor vehicle without a valid driving license”, XX Property Insurance Jinan Branch claimed that the claim was rejected based on this article, and claimed that the contract was not effective on the grounds that this article had not been filed with the China Insurance Regulatory Commission.
Court opinion:
The court of second instance in this case held that whether the insurance clauses were filed or not was not a necessary condition for the establishment and effectiveness of the insurance contract, so the two appellees’ defenses that the insurance clauses had not been filed and approved were not supported.
Case 2: Qin Renhai v. Hefei Branch of a Property Insurance Co., Ltd. and Li Deying Liability Dispute for Motor Vehicle Traffic Accident
Basic case:
The Wan19B0399 variant tractor driven by Li Deying is affiliated with Lu’an Xinrui Automobile Transportation Service Co., Ltd. The company has purchased compulsory traffic insurance and 200,000 yuan third-party liability insurance at the Feixi County Branch of the Hefei Branch of XX Property Insurance Company, XX The Hefei branch of the property insurance company added in the special agreement that “increase the deductible rate by 20% on the basis of the original deductible rate”.
During the insurance period, Li Deying drove the No. Wan 19B0399 modified tractor, causing damage to the houses and belongings of Qin Renhai, Hu Yicai, and Yang Qichang, and two vehicles. The Hefei Branch of XX Property & Casualty Insurance Company made the compensation according to the special agreement “increase the deductible rate by 20% on the basis of the original deductible rate”. The 20% increase in the deductible rate” has not been reported to the Insurance Regulatory Commission for the record.
Court opinion:
The court held that Article 136 of the “Insurance Law of the People’s Republic of China” stipulates that “the insurance clauses and insurance premium rates of insurance types related to the public interest, insurance types subject to compulsory insurance according to law, and newly developed life insurance types shall be reported to the When approved by the State Council’s insurance regulatory agency, the State Council’s regulatory agency shall follow the principles of protecting the interests of the public and preventing unfair competition. The insurance clauses and premium rates of other types of insurance shall be reported to the insurance regulatory agency for record.” It can be seen that, Record filing is not a necessary condition for an insurance contract to take effect. It is only a means or method of supervision and management by the insurance supervisory authority on the insurance company’s business operations, and it cannot be used to deny the insurance contract signed by both parties under the true expression of intention. .
For the insurance clauses that need to be approved, is the special agreement to change the insurance clauses valid without re-approval?
Conclusion: From the point of view of judicial practice, for the insurance clauses that need to be approved, whether the special agreement for changing the insurance clauses without re-approval will affect the effectiveness of the special agreement, the key lies in whether the court will make the insurance clauses and insurance premium rates subject to the relevant regulations of the insurance regulatory agency. Identified as mandatory mandatory provisions. Judging from the current cases inquired from public channels, most courts will not recognize the relevant regulations that insurance clauses and insurance premium rates should be approved by the insurance regulatory agency as mandatory regulations for effectiveness, that is, most courts believe that such special agreements have not been approved. Approval by the insurance regulator will not invalidate such engagements. The following cases are available for reference:
A case of disputes between the Jincheng branch of a property company and Mr. Zhang
Basic case:
In December 2016, the plaintiff, Shangguan XX, applied for personal credit loan guarantee insurance, and the insurance policy stipulated that the insured was Everbright Bank Jincheng Yingbin Street Branch. During the performance of the contract, Shangguan XX returned part of the principal and interest of the loan and paid part of the insurance premium, and then failed to repay the loan and pay the insurance premium. After the insurance company paid China Everbright Bank, it sought compensation from Shangguan XX and demanded payment of the insurance premium. Shangguan XX claimed that the insurance premium stipulated in the insurance policy did not match the multi-year premium rate table that had been filed.
Court opinion:
The court of first instance in this case held that the first paragraph of Article 114 of the “Insurance Law of the People’s Republic of China” stipulates: “Insurance companies shall formulate insurance clauses and insurance premium rates in a fair and reasonable manner in accordance with the provisions of the State Council’s insurance regulatory agency, and shall not damage the insurance policy. the legitimate rights and interests of the insured, the insured and the beneficiaries”. Item (3) of Article 170 stipulates that for an insurance company that “fails to use the approved or filed insurance clauses and insurance premium rates in accordance with regulations”, the insurance regulatory agency may impose corresponding administrative penalties. According to the insurance clauses in this case, the insurance policy is an integral part of the insurance contract. The insurance policy clearly stipulates the insurance amount, insurance premium rate, and monthly insurance premium. Shangguan XX signed the insurance policy for confirmation, and did not raise any objection during the performance of the monthly insurance premium payment. It should be recognized as an insurance policy. The agreement on the fee is the true intention of both parties.
Even if, as claimed by the defendant, the insurance premium agreed in the insurance policy does not conform to the multi-year rate table, it does not violate the mandatory provisions on effectiveness and does not affect the contractual validity of the insurance policy. If the defendant believes that the plaintiff is suspected of using the approved or filed insurance clauses and insurance premium rates in accordance with the regulations, it may report the situation to the insurance supervision and management agency and request administrative punishment.
For further information, please contact:
Yu Dan , Partner, Anjie Broad
yudan@anjielaw.com
