Fraudulent Insurance Claims: A Critical Analysis of Article 27 of the Chinese Insurance Law

A key principle of insurance law is that the insured is under a duty not to make a fraudulent claim, however, fraudulent claims are a serious problem. This article critically examines the provisions relating to fraudulent claims in art.27 of the Insurance Law to see to what extent they reflect the policy of deterring fraudulent claims and at the same time maintaining the needs of justice and fairness to the relevant parties. It is argued that the major drawback in art.27 is its lack of deterrence to fraudulently exaggerated claims. It is suggested that deterrence should be imposed on fraudsters and that the insurer be entitled to reject the entire claim where the fraudulent exaggeration is substantial.