Issues concerning assignment of subject of credit insurance

The assignment of insurance subject has always been an important concept in the insurance law, but there have been a variety of disputes over the issue. The assignment of the subject of property insurance was one of the key issues for revision of the PRC Insurance Law in 2009. Another was Interpretation IV of the Supreme People’s Court on several issues concerning the application of the PRC Insurance Law. These issues raise the question, can every insurance subject be assigned? In the business, covering guarantee insurance, credit insurance and liability insurance, can the subjects thereof be assigned and in what way can they be assigned? This article discusses these questions, using credit insurance as an example.

SUBJECTS AND SUBJECT MATTERS

From the existing perspective, Insurance Law only provides the definition of the insurance subject. In particular, property insurance is where the property and its related interests are the subjects that matter. There is neither further definition of the subject of property insurance nor any definition of subject matter thereof. When it comes to credit insurance, according to the China Insurance Regulatory Commission’s notice, named Issuing the Interim Measures for Regulating the Credit Guarantee Insurance, it is an insurance with credit risks as the subject.

Court practice shows that mainstream opinions are consistent with the opinions of the CIRC. There were different opinions in only a few judgments, such as the one that held the accounts receivable to be the subject of trade credit insurance. In such a case, the writer definitely concurs with the opinions and provisions of the CIRC, but the specific issue needs to be analysed on a case-by-case basis. The writer sees the reason for the minority opinions is that, under PRC laws, there is no strict differentiation between the insurance subject and the insurance subject matter. Also, there is no legal definition of the insurance subject matter. In practice, there are numerous cases where these two concepts are mixed. If there are express provisions, they shall prevail.

Michael Wang is an associate at MHP Law Firm