Part Nine现代金融业务.ppt

Part Nine Fundamental Insurance I. Principles and Contracts II. Types of Insurance III. Insurance Market IV. Insurance Business I. Principles and Contracts 1.Principles Principle of Indemnity It is one of the most important rule for any types of insurance, particularly for property insurance. According to this principle, the insured may not collect more than the actual loss in the event of damage caused by an insured peril. This principle serves to control moral hazards that might otherwise exist. B. Principle of Insurable Interest A fundamental legal principle that strongly supports the principle of indemnity is that of insurable interest, which holds that an insured must demonstrate a personal loss or else be unable to collect amount due when a loss caused by an insured peril occurs. If the insured could collect without having an insurable interest, a moral hazard would exist. If you own a property, you have the insurable interest; If you lease a property, you have the insurable interest; If you steal a property, you have no insurable interest. C. Principle of Subrogation This principle grows out of the principle of indemnity. Under it one who has indemnified another’s loss is entitled to recover from any liable third parties. Thus, if X negligently causes damage to Y’s property, Y’s insurance Co. will indemnify Y to the extent of its liability for Y’s loss and then has the right to proceed against X for any amount it has paid out under Y’s policy. One of the important reasons for subrogation is to reinforce the principle of indemnity. That is , to prevent the insured from collecting more than the actual amount of the loss. If Y’s insurer didn’t have the right of subrogation, it would be responsible for Y to recover from the policy and then recover again in a legal action against X. In this way Y would collect twice. It would also be possible for Y to arrange an accident with X collect twice and split th