Where the law stipulates or conditions that the parties to a contract agree on are met, an insurance contract may be rescinded if the parties to the contract reach a consensus through consultation or either a party to the contract executes the termination right to cancel the insurance contract. Usually, without consent of insurance companies, the insured may cancel the insurance policy unilaterally at any time. That because the insureds buy an insurance product is to protect them from unknown risks, so they have right to choose how and when to protect themselves. The Insurance Law (2009) stipulates that otherwise stipulated by other laws and regulations, or agreed by both parties in insurance contract, after the formation of insurance contract, the insurance contract may be rescinded by the insured. On the contrary, to protect the interest of insureds, the Insurance law (2009) generally prohibits the insurer to terminate the contract casually. Only under some special circumstances, the insurer may be allowed to cancel the insurance contract. Here we simply give a brief summary of those circumstances.

1. Right to terminate the contract given by statute

（1）Provided by Insurance Law (2009) Article 16, if the policy applicant deliberately, or due to gross negligence, fails to perform its obligation of disclosure as mentioned in the preceding paragraph which failure could influence the insurer on its decision as to whether or not to agree to insure or whether or not to raise the premium rate, the insurer shall have the right to terminate the insurance contract.

（2） Provided by Insurance Law (2009) Article 27, if an insured event has not occurred but the insured or beneficiary falsely claims that such an event has occurred, and lodges a claim with the insurer for the payment of indemnities or insurance benefits, the insurer shall have the right to terminate the contract and not return the insurance premiums.

（3）Provided by Insurance Law (2009) Article 27, if the applicant or the insured deliberately causes an insured event, the insurer shall have the right to terminate the contract and shall not be liable for the payment of indemnities or insurance benefits. Unless otherwise provided in Article 43 of Insurance Law (2009), it will not refund the insurance premiums. Article 43 of Insurance Law (2009) provides that if the applicant deliberately causes the death, injury, disability or illness of the insured, the insurer shall be liable for payment of insurance benefits. Where the applicant has already fully paid insurance premiums for two or more years, the insurer shall refund the cash value of the insurance policy to the other entitled beneficiaries in accordance with the contract.

（4）Provided by Insurance Law (2009) Article 32, if the age of the insured reported by the applicant is false and the insured’s true age does not comply with the age restriction specified in the contract, the insurer may terminate the contract and refund, in accordance with the contract, the cash value of the policy.

（5）Provided by Insurance Law (2009) Article 36 and 37, if the personal insurance contract provides for the payment in installments of the insurance premium, and the applicant, after payment of the initial installment of the insurance premium, fails to pay an installment within 30 days after the date of a reminder from the insurer or within 60 days after the specified time limit, the validity of the contract shall be suspended or the insurer shall reduce the insured amount in accordance with the conditions specified in the contract, unless otherwise provided in the contract. If the validity of the personal insurance contract is suspended, its validity shall be restored after the insurer and the applicant reach agreement thereon through consultations and the applicant pays the outstanding insurance premium. However, if the parties fail to reach an agreement within two years from the date on which the validity of the contract was suspended, the insurer shall have the right to terminate the contract.

（6）Provided by Insurance Law (2009) Article 49, if the transfer of the insured object of property insurance contract appreciably increases the degree of risk, the insurer may, in accordance with the contract, increase the insurance premium or terminate the contract within 30 days of the date of receipt of the notice of transfer. If the insurer terminates the contract, it shall refund to the proposer the insurance premium collected minus, in accordance with the contract, the portion to which it is entitled for the period between the date of commencement of its insurance liability and the date of termination of the contract.

（7）Provided by Insurance Law (2009) Article 51, if either the applicant or insured fails to fulfill its/his/her due diligence requirements towards the safety of the subject matter of insurance in accordance with the contract, the insurer shall have the right to request an increase in the insurance premium or terminate the contract.

（8）Provided by Insurance Law (2009) Article 52, if the degree of risk to the insured object increases appreciably during the term of the contract, the insured shall notify the insurer in accordance with the contract in a timely manner and the insurer may, in accordance with the contract, increase the insurance premium or terminate the contract. If the insurer terminates the contract, it shall refund to the proposer the insurance premium collected, minus, in accordance with the contract, the portion to which it is entitled for the period between the date of commencement of its insurance liability until the date of termination of the contract.

（9）Provided by Insurance Law (2009) Article 58, If part of the insured object suffers a loss, the applicant may terminate the contract within 30 days of compensation from the insurer; and, unless otherwise provided by the contract, the insurer may also terminate the contract but shall notify the applicant 15 days in advance. If the contract is terminated, the insurer shall refund to the applicant the insurance premiums for the portion of the subject matter of insurance that did not suffer a loss, minus, in accordance with the contract, the portion to which it is entitled for the period between the date of commencement of its insurance liability until the date of termination of the contract.

2. Right to terminate the contract given by contract

As provided by Article 15 of Insurance Law (2009), the parties to insurance contract may agree in the insurance contract the specific cancellation circumstances. In practice, many insurance companies will use this article to enlarge their right to terminate the contract. They may set some contractual rights to terminate the contract in standard form contract. For example, in some property insurance contracts, parties may agree that if the applicant or insured fails to maintain the security of insured object, the insurer may terminate the contract.