MACAU SAR, CHINA Law and Practice Contributed by: Carlos Eduardo Coelho, MdME
8.2 Warranties Warranties are generally identified as one of the con- tractual terms between the parties, and it is not neces- sary to expressly consider them a standalone section. There are no specific regulations on warranties, which are treated the same as the other contractual terms. A breach of warranties by either party will be considered a breach of the insurance contract. 8.3 Conditions Precedent Conditions precedent are generally identified as con- tractual terms pursuant to which the insurer shall reject a claim or disclaim its liabilities if such conditions are not met. Instead of specifically regulating the condi- tions precedent, the law requires policy wording that determines causes for termination, exclusion, nullity of the policy, or restrictive or risk exclusion provisions to be highlighted in order to be valid. Regulatory guidelines also impose an obligation of clear disclosure in the policy documents of key or infrequent exclusions to clients, and a breach of such obligation may lead to non-compliance with regulatory obligations. 9. Insurance Disputes 9.1 Insurance Disputes Over Coverage For both consumer contracts and reinsurance con- tracts, disputes and/or complaints over coverage under an insurance contract can be handled as fol- lows: • directly between the complainant and the insurer; • through a mediation process pursuant to the “Mediation Scheme for Financial Disputes” launched by the AMCM, the Macau Consumer Council and the World Trade Center Macau Arbitra- tion Center; • through courts of law; or • through arbitration. The limitation period to initiate proceedings depends on the types of insurance and the entity to which the complaint and/or dispute is proposed. As a general rule, the beneficiary should communicate with the insurer within eight days from the day of the event or
• if one of the parties was aware of the real intention of the other party and if such intention differed from what is derived from the contract as construed according to the general rule referred to above, the contract shall stand with the meaning correspond- ing to the real intention of such party; and • where the law imposes a written form for the con- tract, its clauses cannot be construed as having a meaning that does not bear at least a minimal cor- respondence to the text of such document, unless such meaning corresponds to the real intention of the issuer and the reasons imposing the adoption of a written form do not preclude that the declara- tions stand with a meaning that corresponds to the true will of the parties. Although the interpretation of the declaration shall be done on a casuistic basis, doctrine and jurisprudence have construed some circumstances or criteria to aid the interpreter. For example: • the terms of an agreement should be read in con- text (ie, as a whole) and not as isolated provisions; • the terms of an agreement should be read consid- ering the business interests of and the objectives pursued by the parties; • business practices, the business environment and business language should be considered; and • the parties’ commercial and legal sophistication should be taken into consideration. This means that there are no specific restrictions on extraneous evidence, and market or industry practice may be used as evidence. If the above-mentioned circumstances or criteria for interpretation lead to a doubtful result, Article 970 No 2 of the Macau Commercial Code provides a special criterion applicable to insurance contracts, according to which any general or special clauses drafted by the insurer shall be interpreted in the manner most favour- able to the insured party. Such rules are applicable to consumer contracts indis- tinctively but not to uniform policies (eg, car insur- ance), which are regulated by specific regulations.
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