MACAU SAR, CHINA Law and Practice Contributed by: Carlos Eduardo Coelho, MdME
• properly handle and timely submit all premiums or other related amounts collected from clients to the insurer; • comply with applicable laws and regulations for insurers and insurance intermediaries, and not engage in contracts or activities that violate such regulations; • negotiate or conclude insurance contracts or provide other insurance intermediary services on behalf of clients only with insurers licensed to oper- ate in the Macau Special Administrative Region, unless otherwise stipulated by law; • avoid engaging in unfair competition, especially spreading false information about insurers or other intermediaries that could damage their reputation or providing incorrect information to clients for personal gain; • avoid underwriting risks in their own name; and • engage only in business activities authorised by the AMCM. Proper internal monitoring measures and procedures are also required to be established by corporate insur- ance agents, insurance brokers and insurers that con- duct business through insurance intermediary distri- bution channels. 6.4 Legal Requirements and Distinguishing Features of an Insurance Contract An insurance contract is specifically defined in the MIO and the Macau Commercial Code as a contract according to which the insurer undertakes to indem- nify – within the agreed limits, against payment of a premium and upon occurrence of the event covered by the contract – the loss or damage so incurred by the insured or to settle a capital sum, a rent or other payments stipulated therein. Legal Requirements of Insurance Contracts The legal requirements are regulated under the Macau Commercial Code. The insurance contract must: • be in writing; • be written in a clear manner; • be dated and signed by the insurer; and • include other minimum mandatory elements as stipulated under Article 969 of the Macau Commer- cial Code.
In particular, the insurance policy must contain at least the following elements: • identification and domicile of the parties, and of the insured and the beneficiary if applicable; • the nature of the insurance; • the interest covered; • the beginning and termination of the contract; • premiums and applicable additional amounts; and • excesses, mandatory deductibles and all other conditions agreed by the parties. • the risks covered; • the capital insured; Policy wording that determines causes for termina- tion, exclusion, nullity of the policy, restrictive or risk exclusion provisions must be highlighted in order to be valid. Applicable law does not prescribe any spe- cific form of highlighting for such wording. Risk and Insurable Interest Risk The law specifically requires the existence of risk to be insured (with some limitations for carriage insur- ance). An insurance contract shall be void if, at incep- tion, there is an absence of risk, or if the incident has The law also requires an insurable interest at the inception of a life policy. Such requirement is express- ly stated for property damages insurance; there is no such express reference for life insurance, but it likely applies to these policies as well. Such insurable inter- est relates to the insured, and the expression of such interest differs between life insurance and damages insurance. already occurred. Insurable interest In life insurance policies, the insured is the person whose life or health is covered under the policy and, as such, the insurable interest in a life insurance policy is almost inherent and is presumed when the insured is simultaneously the original policyholder. When the policy is taken out by a third party, the insured would have to consent in writing to the policy. Therefore, such consent may also arguably create the presump- tion that the person insured has an interest in the policy.
316 CHAMBERS.COM
Powered by FlippingBook