When the people’s protected constitutional rights are violated, they may pursue litigation following legal procedures. If the petitioner has questions on the constitutionality of the statute or regulation relied thereupon by the court of last resort in its final judgment, the petitioner may request interpretation by the Judicial Yuan according to Article 5, Paragraph 1, Subparagraph 2, of the Constitutional Interpretation Procedure Act. The interpretation of the subject matter evaluated is not limited to that specified in the petition, but may include the laws and orders adopted to reach the final verdict and those closely related requested for interpretation in the petition. The Supreme Court Precedent T.S.T. No. 1166 (Supreme Court, 1987) and Articles 36 and 37 of the Insurance Act have been adopted as bases for ruling by the same court in T.S.T. No. 2490 (2000). Whether this decision coincides with the principle of the Insurance Act and conflicts with the Constitution shall be addressed below.
Freedom of contract is an essential mechanism for individual self-development and self-accomplishment, and the basis for self-government under private law. Depending on the actual content of the contract, freedom of contract is protected by the Constitution under related provisions of fundamental rights. For example, a contract for property disposal is protected by Article 15 of the Constitution; a contract regarding the association of people is protected by Article 14. In addition, the freedom of contract is one of the liberties preserved under Article 22 of the Constitution. Only when it is necessary to defend public interests may such a freedom be reasonably restricted under the law. Article 36 of the Insurance Act provides: “The insurant of multiple insurance shall inform each insurer of the names of and the amount insured under other insurers, unless specified otherwise.” Article 37 states: “The insurance agreement shall be void if the insurant purposely fails to inform or intentionally obtains multiple insurance for unjust enrichment.” The principle of compensation for actual damages prevents the insured from unjust enrichment and obtaining insurance payments exceeding the value of property damages. Moreover, to maintain the trade order of the insurance market, lower transaction costs, protect the development of the insurance system, and defend the rights of the insured public, reasonable restriction on multiple insurance in compliance with Article 23 of the Constitution does not conflict with the fundamental right of freedom of contract.
Providing remedy for the actual property damage of the insured is not the main purpose of personal insurance. Since the life and physical integrality of the insured cannot be monetarily quantified, there is no objective standard by which to determine whether the insurance payment is overcompensating. The parties of the contract can merely agree upon a fixed amount of insurance payment when an accident occurs. Unlike property insurance that compensates for actual damages, personal insurance does not cause unjust enrichment. Hence, Articles 36 and 37 of the Insurance Act do not apply to personal insurance policies. The Supreme Court Precedent T.S.T. No. 1166 holds: “Article 35 of the Insurance Act states that when the insurant enters into several insurance agreements with several insurers for the same insured interest or insured accident, it is called ‘multiple insurance.’ According to Article 36 of the same Act, the insurant of multiple insurance shall inform each insurer of the names of and the amount insured under other insurers, unless specified otherwise. Therefore, for the multiple insurance to be valid, the insurant shall simultaneously establish insurance agreements with each insurer individually. If the insurant enters into insurance agreements with more than two insurers, one after the other, the agreements do not yet constitute multiple insurance. If the insurant purposely fails to inform the latter insurer of the existence of the prior insurance agreement, according to Article 37 of the Insurance Act, the latter insurance agreement, rather than the former one, shall be void.” Although the scope of application of multiple insurance is not expressly specified, the above Precedent relates to a dispute arising from multiple personal insurance, applying Articles 36 and 37, of the Insurance Act, relating multiple insurance to personal insurance policies. For the protection of freedom of contract, the Precedent enforces restrictions not included in the two provisions, thus, it shall cease to be effective from the declaration date of this interpretation.
As to the petitioner’s assertion that Articles 36 and 37 of the Insurance Act adopted to reach the above final verdict conflict with Article 7 of the Constitution, it should be noted that the subject provisions did not result in discrimination or violation of equal rights.
The petitioner requested a unified interpretation due to the difference between the above final verdict and other verdicts of the Supreme Court. The difference was among the opinions in reaching the final verdict in the same court, rather than among different courts applying identical laws or orders in reaching the final verdict. This does not coincide with Article 7 Paragraph 1 Subparagraph 2 of the Constitutional Interpretation Procedure Act. Accordingly, the petition should be denied based on Paragraph 3 of the same Article.
*Translated by Wei-Feng Huang of THY Taiwan International Law Offices.