CONTENTS

(1) When does the limitation period start to run for insurance contract?

The six year limitation period starts to run from the date on which the cause of action accrued. For property insurance policies, this will be the date of the insured event. For liability policies, this will be the date when the liability of the insured is ascertained by judgment, award or settlement.

(2) When does the limitation period start to run for reinsurance contracts?

The six year limitation period starts to run from the date when the liability of the reinsured is ascertained by judgment, award or settlement. It does not matter when the reinsured makes actual payment.

(3) Can the limitation period be suspended and/or interrupted, and if so, how?

Yes. Time will start to run again if there is a written acknowledgment of the cause of action or part payment. Waiver and estoppel arguments can also be raised.

(4) Can the express terms of the insurance policy and/or reinsurance contract have the effect of altering the start date for the limitation period?

The parties can agree to alter limitation by contractual terms. However, if the alteration has the effect of shortening the limitation period, that clause will be construed in the same way as an exclusion clause (and the contra proferentem rule will apply).

(1) When does the limitation period start to run for insurance contract?

The 6 year limitation period starts to run from the date of the insured event. For liability insurance, it starts to run from the date that liability is established by judgment, arbitration award or binding settlement.

(2) When does the limitation period start to run for reinsurance contracts?

The 6 year limitation period starts to run from the date when the reinsured's liability is established and quantified by judgment, arbitration award or binding settlement.

(3) Can the limitation period be suspended and/or interrupted, and if so, how?

The limitation period can be suspended by a standstill agreement between the parties. If the claim is acknowledged, time will start to run again from the date of acknowledgement.

(4) Can the express terms of the insurance policy and/or reinsurance contract have the effect of altering the start date for the limitation period?

Yes.

(1) When does the limitation period start to run for insurance contract?

For life insurance, the limitation period is five (5) years, counting from the date when the claimant knows or should have known that its rights have been infringed upon. For non-life insurance, the limitation period is two (2) years, counting from the date when the claimant knows or should have known that its rights have been infringed upon.

For instance, if the insured pursues a claim against the insurer, the time limit should start running from the date of occurrence of the insurance incident.

(2) When does the limitation period start to run for reinsurance contracts?

The limitation period is two (2) years, counting from the date when the claimant knows or should have known that its rights have been infringed upon. For instance, if the reinsured pursues a claim against the reinsurer, the time limit may start running from the date when the reinsured's (original insurer) liability under the original insurance policy is ascertained.

(3) Can the limitation period be suspended and/or interrupted, and if so, how?

Yes. Under Chinese law, the limitation period can be discontinued and / or interrupted by the following way:

- The claimant lodges a claim against the liable party; - The liable party agrees to perform its obligation or assume its liability; - The claimant starts legal action or arbitration.

(4) Can the express terms of the insurance policy and/or reinsurance contract have the effect of altering the start date for the limitation period?

No. The time limit issue is mandatory under Chinese law and cannot be amended or extended via parties' voluntary agreement.

(1) When does the limitation period start to run for insurance contract?

Australian states and territories have a six-year year limitation period from the date on which the cause of action accrues, ie when the insurance contract is breached. There is one exception, the Northern Territory, where there is a three year limitation period.

In the case of first party loss, Australian courts have historically determined that the cause of action commences as soon as damage to the property occurs because the promise to indemnify is breached at that time (see for example Commonwealth v Vero Insurance Limited [2012] FCA 826). However, in Carillion Construction Ltd v AIG Australia Ltd [2016] NSWSC 495 a distinction was drawn between the insured's entitlement to indemnity (at the time of the loss) and the time when the insured's entitlement to sue for damages arises for breach of contract (when it becomes unreasonable for the insurer not to pay). It is now increasingly likely that Australian courts will determine that time will start to run on limitations, for a first party insurance claim, only when it becomes unreasonable for the insurer not to pay or otherwise when cover is declined. It is then that the contract is breached.

The position in respect of liability insurance is more settled. Time will start to run from the date when the insured's liability is established by judgment, arbitration, award or settlement.

(2) When does the limitation period start to run for reinsurance contracts?

Reinsurance contracts are subject to the same limitation period as for insurance contracts. Time will start to run from the date that the cedent's liability to the insured is established by judgment, award or agreement. Time does not start to run from the date that the cedent pays the insured.

(3) Can the limitation period be suspended and/or interrupted, and if so, how?

It is likely that the limitation period can be interrupted by the (re)insurer acknowledging that it will pay a claim (depending on the facts of the case).

(4) Can the express terms of the insurance policy and/or reinsurance contract have the effect of altering the start date for the limitation period?

Yes, Australian court may give effect to an express stipulation in a policy of insurance or reinsurance which seeks to alter the usual position on the start date for the limitation period. However, if the effect is to shorten the limitation period, there are also statutory provisions which allow a court to override the contractual agreement.