A voidable contract is one of the important provisions of the Civil Law in general and the law on insurance business in particular. To conclude an insurance contract is invalid or not, it is necessary not only to rely on civil law provisions, but also to rely on specialized provisions of the Law on Insurance Business. So, in what cases is the insurance contract considered invalid? And how to handle in these cases? The following article will help you answer questions about the above issues.

1. What is an insurance contract? Conditions of validity of the insurance contract?

An insurance contract is an agreement between an insurance buyer and an insurance enterprise, whereby the insurance buyer must pay a premium, the insurer must pay the insurance premium to the beneficiary or indemnify the beneficiary. insurance when the insured event occurs. Insurance contracts include: personal insurance contracts; property insurance contract; civil liability insurance contract. An insurance contract is also a civil contract, so a valid insurance contract must also satisfy the conditions for validity of a civil contract under the provisions of the Civil Code 2015. Based on the 2015 Civil Code, it can be seen that the effective conditions of an insurance contract include:

• The insurance buyer must have civil act capacity (if it is an individual) or civil legal capacity (if it is an organization), the insurer must have civil legal capacity;
• The purpose and content of the insurance contract do not violate the prohibition of the law, do not violate social ethics;
• The parties to the insurance contract are completely voluntary;
• The insurance contract must be concluded in writing.

However, as a special and important type of contract not only in the civil field in general but also in the insurance business in particular, for a life insurance contract to arise on In fact, there are many other factors. One of them is the obligation to declare truthful and accurate information of the insured. The buyer must provide full information about the health status of the insured, especially the symptoms and diseases that have been prepared by the businesses in the available questions in the insurance claim file. . In addition, the insurance buyer also needs to provide documents and evidence to prove issues related to his or her health status.

2. In what cases is the insurance contract invalid?

Article 22 of the Law on Insurance Business in 2000 (amended and supplemented in 2019) stipulates as follows:

“Article 22. Invalid insurance contract

The insurance contract is void in the following cases:

a) The policyholder has no insurable interests;

b) At the time of entering into the insurance contract, the insured object does not exist;

c) At the time of entering into the insurance contract, the insurance buyer knows that the insured event has occurred;

d) The insurance buyer or the insurance enterprise commits deceitful acts when entering into an insurance contract;

d) Other cases as prescribed by law”

Thus, about the cases of invalid insurance contracts, we can understand specifically as follows:

First, the policyholder has no insurable interest. Insurable interests are ownership, possession, use, and property rights; rights and obligations to nurture and support the insured. Benefits that have not yet arisen or have ceased are not insurable interests. Even if the effective term of the policy is still there, but the policyholder no longer has insurable interests, the contract will be void.

Second, at the time of entering into an insurance contract, the subject-matter insured does not exist. The subject of insurance is one of the indispensable elements in the content of an insurance contract. If the subject-matter insured cannot be identified, the insurer cannot perform the obligation to bear the risk to the insured. The non-existence of the subject-matter insured also indicates that the insurer has deceived or misled the insurer, and leads to the nullity of the contract.

Third, at the time of entering into the insurance contract, the insurance buyer knows that the insured event has occurred. As analyzed above, the insured event must be an objective event that the parties do not want to occur and cannot be known at the time of entering into the contract. In case the insurance buyer knows that the insured event is certain to happen or is happening but still intentionally enters into a contract, it is a deception to the insurer.

Fourth, the insurance buyer or the insurance enterprise commits a fraudulent act when entering into an insurance contract. Deception is understood as an illegal act of intentional nature of a person in order to make others confused about the subject, the nature of the object or the content of the contract, thus expressing the will to communicate. enter into a contract and have entered into a contract in favor of the person who has committed illegal acts on or for a third person. In an insurance contract, deception may be the intentional act of the policyholder in providing the insurer with false information about the insured object, or intentionally failing to provide the insurer with false information. insurance the necessary information about the subject matter insured. Or the insurer gives incorrect information about the ability to provide and perform insurance operations, so that the insurance buyer enters into a contract.

3. How to handle invalid insurance contracts?

The handling of invalid insurance contracts shall be applied in accordance with the provisions of the Civil Code 2015:

– An invalid insurance contract does not give rise to, change or terminate the civil rights and obligations of the parties from the time of its establishment.

– When the insurance contract is invalidated, the parties will restore the original condition. Specifically: insurers return premiums; the insured party returns the indemnity, premium (if any) – in whole or in proportion to the invalidated part; The party at fault for the invalidity of the insurance contract must indemnify the other party for related losses.

Thus, in many cases, due to objective reasons (for example, insurance buyers listen to unclear advice) leading to failure to provide sufficient information about their own health status to businesses. insurance industry. When an insurance event occurs, during the appraisal of the dossier, the insurer will assume that the insurance contract is invalid because the insurance buyer violates the obligation to declare information. The enterprise only agrees to return the insurance money that the policyholder has paid after deducting necessary fees and charges without any payment for the insured event that has occurred. This is extremely disadvantageous for the insurance buyer. Therefore, with this article, we hope that those who have, are and will intend to participate in an insurance contract, especially a life insurance contract, clearly understand the provisions of relevant laws. regulations and insurance terms and conditions of the insurer, being prudent in the consulting process and wise in the process of entering into a contract, fully performing their obligations as clearly defined by the law. clear.

Above is Khoa Tin‘s advice on “Insurance contract is invalid and handling measures”.

In case customers have unclear problems or need to discuss further, please call us immediately at 0983.533.005  for a free consultation.

Best regards./.