The Insured's Post-Contract Duty of Notification of Increase of Risk: Comparative study in Iranian, Chinese insurance law and principles of European insurance contracts

Abstract

Risk management in insurance contract is very important due to the continuous and onerous nature of such a contract. Considering the importance of risk management in insurance contracts; insurance law systems have established institutions for managing such a risk. Warranties in common law and the alteration or increase of risk in the civil law countries are the institutions which assist the insurer to control risk increase. However, benefiting from such right requires the insured’s subordinate duty to inform the insurer about the increased risk. The question that come to mind in this regard is: what are the conditions of establishment and the sanction for breaching this duty? In this respect, the insurer's obligation must be determined in a way that it does not entail the imposition of the burdensome obligation on him and meanwhile, it must be determined by considering the degree of insured’s fault and proper application of causal connection. By using descriptive-analytical method in line with explaining insured’s duty to notify, realization conditions of this duty, and sanctions of breaching such a duty; this article is seeking to provide a proper sanction template in order to modify the bugs and eliminate deficiencies in the Iranian insurance act and regulations of Supreme Insurance Council.