International Law Office - Legal Newsletters, Law Firm Directory and Legal News

Algeria

Including: Forms of Insurance; Insurance Activity; Risks.

Argentina

The insurance regulator has issued a new resolution which amends the General Insurance Regulation. Among the many changes that it introduces, the new resolution increases the amount of documents and information that board members and officers of local insurance and reinsurance companies must provide to the insurance regulator.

Under the 2012-2020 Insurance Plan a percentage of the investment portfolios of insurance companies will be redirected to mid-term and long-term productive and infrastructure projects. However, the insurance regulator recently stated that redirection of insurers' investments in the real economy is just one of the plan's goals. The insurance and reinsurance market should therefore prepare itself for new regulation.

The president and the Ministry of Economy recently announced the 2012-2020 Insurance Plan. Under the plan, a percentage of insurance companies' investment portfolios must be redirected to mid-term and long-term productive and infrastructure projects, among other things. How this plan will evolve and its real impact on the industry are expected to become evident in the next few months.

The insurance regulator recently issued a new resolution that focuses on the need to assign a specific code to new reinsurance or retrocession contracts. The resolution provides that all reinsurance or retrocession contracts entered into by insurance companies or local reinsurers must be identified by a reinsurance operation code. The code must be submitted before the contract enters into force.

Admitted reinsurers are authorised to offer reinsurance from their head offices only on a per-exception basis, and may freely offer retrocession coverage to 'local' reinsurers. The insurance regulator recently introduced a controversial requirement for admitted reinsurers to register a permanent establishment in Argentina. The registration process at the Buenos Aires Office of Companies has been plagued with difficulties.

Under the Minimum Capital Requirements Regulation, reinsurers that start the registration process for operation as a local reinsurer will shortly be required to deposit an initial capital equal to twice the minimum capital (which can be later reduced). To avoid this increase, international reinsurers that wish to become local reinsurers are advised to begin the registration process before the change.

More updates >

Australia

The federal government has released a proposal outlining 25 refinements to improve the practical operation of the financial services regulation introduced by the Financial Services Reform Act 2001. One proposed refinement is the streamlining of product disclosure statements as they relate to general insurance products.

In a decision that has significance for all insurers, the Court of Appeal has extended the rights and obligations owed to third-party beneficiaries. Although this case dealt with the insurer of a superannuation fund trustee, the decision is significant for all insurers.

Recent High Court decisions have illustrated the court's strict approach to the construction of policy terms. The decisions emphasize how important it is for insurers and insureds alike to ensure that policies clearly identify the cover provided.

The review panel looking at the Insurance Contracts Act 1984 has found that the act is generally operating satisfactorily and to the benefit of both insurers and insureds. The government will now prepare a draft bill to address the main recommendations - the bill will be released for public comment before its introduction.

A court has indicated that settling a claim made by a third party is not, in itself, sufficient proof of liability on which an insured may base a claim for civil liability indemnity, and damages cannot be recovered for settlements made by an insured before any breach of contract by the insurer, regardless of whether such a breach subsequently occurs.

The Court of Appeal of the Supreme Court of New South Wales has ruled on the distribution of the assets of an insolvent reinsurer. The case has clarified aspects of the Corporations Act and Insurance Act, including that Section 116 of the Insurance Act gives rise to accrued rights at the commencement of the winding-up of a company.

More updates >
Show archive >

Austria

In a recent decision the Supreme Court found that an insurer's awareness of a substantial risk - and its omission to enlighten the insured about this issue - might be taken into account not only in the context of damages claims, but also when interpreting the contractual provision in question. The court ruled that all knowledge of an insurance agent must be directly attributed to the insurer.

The good conduct rules that apply to investment advisers in Austria also apply to brokers selling insurance policies which are similar to investment products. A recent Supreme Court decision dealt with the brokerage of second-hand life insurance policies – the investors had complained that the insurance broker had failed to notify them adequately of all the risks involved.

Following the recent economic crisis, the need arose to make it easier for insolvent companies to continue their business through restructuring. This objective was achieved through a reform to the Insolvency Law 2010. It has been market standard to include 'insolvency clauses' in financial lines insurance policies in particular. From the point of view of the act, such insolvency clauses are now ineffective.

Bahamas

The Insurance Act 2005 introduced a new system for licensing and regulating domestic insurers based on the international standards prescribed by the Financial Action Task Force and the principles of the International Association of Insurance Supervisors. Additionally, the act and accompanying regulations introduce a degree of harmonization with the insurance legislation of a number of other jurisdictions in the region.

In light of the increasingly restrictive regulation in many onshore jurisdictions and the escalating costs of conducting insurance business in both onshore and some offshore insurance centres, the Bahamas has introduced the External Insurance Act 2009, incorporating several innovative features which are unique to the jurisdiction.

Bermuda

Bermuda is emerging as a leader in the global insurance-linked securities market, just three years after such securities were first listed on the Bermuda Stock Exchange. The island will further make its mark on the world stage when it hosts the global insurance-linked securities conference in November 2013. Moreover, there are good reasons to anticipate that this market will continue to grow in Bermuda.

A draft report of the European Insurance and Occupational Pensions Authority has raised hopes that Bermuda's regime for commercial insurers will meet regulatory equivalence with the new Solvency II rules for the large commercial (re)insurance sector, but without having to impose the same complex rules on the captive insurance sector.

The Bermuda Monetary Authority has published its latest regulatory update which contains figures for the first quarter of 2011. Developments include the launching of a series of industry awareness sessions and technical workshops to ensure that the insurance market remains aware of new requirements resulting from the authority's regulatory enhancements.

New legislative amendments have increased many of the fees payable to the Bermuda Monetary Authority under the Insurance Act. The date and manner in which fees are to be paid under the Insurance Act have also been amended and new provisions have been included to introduce late penalty fees and to allow the authority to recover any fee or penalty as a civil debt.

A new law which came into force in December 2010 enhances the Bermuda Monetary Authority's current insurance regime and introduces changes to the classification of insurers carrying on long-term business, notification requirements in the event of a change in control, and group supervision, among other things.

The new Insurance Code of Conduct is part of continued reforms being implemented by the Bermuda Monetary Authority to further its objective of establishing a risk-based regulatory regime that meets or exceeds international standards. The code summarises existing best practices adopted by Bermuda insurers and is more a document of consolidation than one which creates new obligations.

More updates >

Brazil

The extension of strict liability to a broad range of activities has required new methods for financing potential indemnities and has led to a need for insurance to protect against the losses that can result from damage claims. However, despite the strong growth of the civil liability insurance market, and of directors' and officers' insurance in particular, few court cases have involved disputes related to this type of coverage.

Canada

Canadian insurers have a busy year ahead if they are to meet new regulatory initiatives from the Office of the Superintendent of Financial Institutions. They will not only have to prepare regulatory solvency assessments, but also prepare to meet the requirements of the revised Corporate Governance guideline, while at the same time addressing new requirements for processes to verify earthquake data and utilise sound earthquake models.

The Ontario Court of Appeal has confirmed that insurance sales brokers may be free to take their books of business to competing firms following the termination of their services. In addition to clarifying the law on unlawful conduct conspiracy and wrongful resignation, the decision confirms that – in the absence of an agreement to the contrary – an independent contractor is the sole owner of his or her own book of business.

In late January the Office of the Superintendent of Financial Institutions released its final version of the revised Corporate Governance Guideline, which reflects its response to commentary received on the first version published in August 2012. Among other things, the revised guideline confirms that insurers and other regulated institutions may implement its requirements in a manner that is best suited to the organisation.

Whether an insurer providing professional insurance to an employer is liable for the acts of employees at a non-traditional work event will be a fact-specific determination and will differ depending on the policy and the event. However, a recent British Columbia Court of Appeal decision has made it clear that liability will not extend indefinitely and courts will likely take a practical, commercially reasonable approach.

A recent Ontario Court of Appeal case illustrates that insurance policies are significant commercial contracts that deserve to be treated as such. The case also illustrates how parties may protect themselves for anticipated claims under 'claims-made' policies that are about to expire and under subsequent claims-made policies.

The Office of the Superintendent of Financial Institutions has issued a new draft guideline on corporate governance. The most obvious change introduced by the new guideline, and one of particular relevance to the insurance industry, is the increased focus on risk. Risk management is now a mere subset of risk governance, which entails a more systematic, defined and holistic approach to dealing with risk.

More updates >
Show archive >

Cayman Islands

The Cayman Islands is becoming a 21st century model of how capital markets can meet the needs of reinsurance. The scope for new capital markets vehicles to underwrite reinsurance risk is growing, and Cayman has the professional infrastructure and the legal, regulatory and tax environment to welcome them. Cayman has become the centre for catastrophe insurance securitizations and sidecar reinsurance vehicles.

There are few reported decisions in the Cayman Islands dealing with issues relating to the duty of disclosure which arises in the context of insurance contracts. A recent Court of Appeal decision now represents one of the leading decisions in the jurisdiction dealing with the application of the duty of disclosure.

Chile

In a recent ruling a well-known arbitrator controversially decided that his vision of equity should take precedence over the wording of an insurance contract. Under the bank's insurance policy, rural risks of all kinds were subject to prior approval by the insurer, which the bank had failed to obtain. However, the arbitrator admitted the bank's claim, deciding that the policy was not to be construed literally.

The new regulations for loss insurance adjustments will come into force shortly and will take into account the impact on the insurance market of the February 2010 earthquake. The regulations have been updated in accordance with the increases in both the amount of insurance being taken out in the country and the amount of individual claims, and mainly refer to the duties of insurance companies and loss adjusters.

The highest court in Chile recently established that the claimant must prove that its loss was accidental. The decision referred to life insurance cover, but its doctrine is applicable to all types of insurance. In a second case, the Court of Appeal of Santiago ruled on a breach of the insured's duty to disclose fully to the insurer all of the relevant aspects for the assessment of the risk.

In cases of death or injury, it is common for the injured party or his or her relatives to claim compensation for 'moral damages' (ie, pain and suffering experienced due to the injury or death). However, for many years the calculation of such damages has been difficult to predict. This situation may be about to change, as a statistical table is being prepared for reference purposes in relation to compensation payable for such damages.

New legislation has been issued regarding corporate governance and risk management, and a draft bill on risk-based supervision sent to Congress. The draft includes new requirements of capital based on risk, which will correspond to the losses expected due to various risks, including insurance or technical risk, investment risk and operational risk. Corporate governance of insurance companies will also be strengthened.

A bill to amend the insurance provisions contained in the 1865 Commercial Code should be enacted in the near future. The bill will also amend the Criminal Code, as it will establish - for the first time - insurance fraud as a specific crime. The basis for this change is that since insurance fraud has no special classification at present, it is treated as a general type of fraud, which makes it difficult to pursue.

More updates >
Show archive >

China

The environment is an important issue for the Chinese government, while surveys and social media show increasing public concern over environmental pollution. Against this backdrop, the Ministry of Environmental Protection and the China Insurance Regulatory Commission have issued new guidelines establishing the pilot enterprises that are subject to compulsory environmental pollution insurance.

At the end of 2011 the Hunan Province Administration for Industry and Commerce (AIC) received multiple reports concerning monopoly agreements and the elimination of competition on a new auto insurance market operated by the New Auto Centre. Following an investigation, the AIC has imposed a penalty of Rmb1.7 million on some of the involved parties.

The China Insurance Regulatory Commission and the Supreme Court have jointly issued a notice to establish a collaboration system linking insurance litigation to mediation in some areas. Considering the limited judicial resources in many insurance disputes, the court has chosen insurance litigation as the first sector in which to begin actively encouraging alternative dispute resolution over court proceedings.

Show archive >

Croatia

This update outlines the incorporation and registration requirements, pursant to the Company Law and the Insurance Law, for companies registering for insurance activities.

Denmark

No guarantee fund exists to protect policyholders in the event that an insurance company goes bankrupt. A new bill establishes a private, independent fund to deal with insurance claims that are not covered in the event of the bankruptcy of a non-life insurance company. All non-life insurance companies set up in Denmark must be a member of, and contribute to, the fund.

A parliamentary committee has issued a White Paper concerning the Danish Insurance Contracts Act. Although the committee has recommended adjustments or specifications to protect the interests of policyholders, rather than the drafting of an entirely new act, it remains to be seen whether a majority of Parliament will adopt the recommendations.

Suggested amendments to the Liability for Damages Act should be considered in light of the Industrial Injuries Insurance Act and contemplated proposals for separate amendments.

A recent case before the Maritime and Commercial Court concerned a carriage of insulin which was exposed to frost. The importer claimed full damages against the carrier on the grounds of its carrier liability insurance (open policy).

A government commission has recommended radical amendments to the 1984 Act on Liability for Damages. Major changes would be made in areas such as temporary loss of earnings, permanent injury and permanent loss of earnings capacity.

According to a ruling by the Danish Competition Authority, legal aid insurance will no longer form an automatic part of domestic consumer insurance products. The ruling follows an unsuccessful action brought by the Association of Danish Insurers concerning group exemption from the ban on non-competitive agreements.

More updates >

Estonia

The Civil Chamber of the Supreme Court of Estonia has found that a standard term precluding an insured event if a vehicle is stolen using previously stolen keys would be so surprising to a policyholder acting in good faith that, under Section 37(3) of the Law of Obligations Act, such a standard term cannot be regarded as part of the insurance contract.

European Union

The European Commission recently presented its proposal for a directive on reinsurance, intended to provide a framework for cross-border operations of reinsurance undertakings on the basis of supervision by home state competent authorities. Among other things, supervision would enhance the single market in an area where there is currently no EU-level regulation.

The European Commission has commenced court proceedings against eight member states for their failure to implement the EU Directive on the Winding-Up of Insurance Companies. The directive aims to guarantee consumer protection when insurance companies are wound up, and also ensures the protection of creditors by granting them preferential treatment in a winding-up.

The EU Council of Ministers recently reached agreement on the proposed Fifth Motor Insurance Directive. Its purpose is to improve the provisions of existing EU motor insurance directives by making it easier for drivers to obtain insurance and make claims, and by improving the protection of victims.

The European Commission has decided to institute infringement proceedings against France, Luxembourg, Italy, Ireland and Portugal before the European Court of Justice following their failure to implement the Fourth Motor Insurance Directive.

A new regulation on the application of EU competition law in the insurance sector has been adopted. The regulation lists a number of categories of exemption, and provides for the authorization of exchanges of statistical information and joint calculation of risks to ensure insurers have accurate information about the risks which they insure.

The Insurance Mediation Directive, which recently entered into force, sets out minimum professional standards for the registration and supervision of insurance intermediaries by their home member state, allowing them to carry on cross-border business in the European Union. The 'recast' Life Insurance Directive was also recently adopted.

Finland

The Supreme Court recently questioned whether a savings life insurance policy was attachable when at the time of the attachment proceedings the policy had been in force for over 10 years, while considering that a precautionary seizure of the policy had been enforced before the 10-year period had elapsed. The court held that attachment and precautionary measures are different instruments.

The Nordic marine insurance market recently became standardised when the Nordic Marine Insurance Plan 2013 entered into force. The plan 2013 includes amendments and new clauses whereby references to Norwegian legislation have been deleted and adjusted to work in accordance with Danish, Finnish and Swedish legislation. It is not mandatory for insurance contracts parties, but they can modify any part of it.

As part of broader reforms to improve adaptation to climate change, the slow and complex state compensation system for flood damages will be abolished. State funding will come to an end in regard to damages caused to buildings and movables, and will be replaced by flood insurance offered by insurance companies.

The Insurance Court recently ruled that in order to fulfil the requirements of equal treatment imposed under EU Regulation 1408/71, parental allowance must be calculated by taking into account the income of an individual who is similarly employed in Finland and with comparable experience and qualifications.

The rate of payment defaults has been increasing in the last few years. The Insurance Contract Act was amended in 2010 in order to prevent insurance applications being rejected solely on the basis of applicants' public credit records, which are available from the public data registry. Such a rejection is acceptable only if the insurer can objectively assess that the applicant is likely to default on its payments in future.

The insurance industry must comply with good insurance practice. Usually, disputes are decided directly under the law and applicable insurance conditions. However, in some cases which are open to interpretation, good insurance practice may be the decisive factor. The Insurance Complaints Board's practice demonstrates that good insurance practice can sometimes be worth money to the claimants.

More updates >

France

The Supreme Court recently considered a case of premium misappropriation by an insurance broker. The question for the court to determine was against which party the claimant was entitled to claim reimbursement of the funds misappropriated by the broker put into liquidation.

The Supreme Court has reaffirmed its policy to protect an insured against warranty exclusion provisions that deprive the warranty clause of its effect, thus extending common case law to insurance warranties. The court has rung a clear warning bell for the insurance industry that warranty exclusion provisions will be severely controlled not only in terms of their form, but also in regard to their effect on the warranty.

The Court of Cassation recently confirmed the scope of the duty to inform and advise imposed on insurance intermediaries by the Law of December 15 2005. It held that the agent of a brokerage firm had a personal duty to inform and advise the firm's clients, and that this duty did not end upon delivery of an information notice.

The Transport Insurance Order has been published in the Official Journal. The new order updates the rules applicable to transport insurance. Therefore, the reform aims not only to harmonise the insurance legal regime for transported goods, but also to compensate for the lack of rules specifically dedicated to aviation and aerospace risks.

Punitive damages have been receiving attention not only from the legislature, but also from the Court of Cassation, which issued an interesting decision on foreign judgments granting punitive damages. Whether insurance coverage will be available for foreign decisions that award punitive damages may be a vital question for insureds, insurers and plaintiffs.

The Court of Cassation recently issued an unusual decision on how a rescission of sale should affect the positions of buyer and seller in relation to their insurance contracts. The court ruled that after a rescission of sale, the positions of the parties were reset to the way that they stood before the sale occurred, allowing the original owner to claim damages.

More updates >
Show archive >

Guernsey

In early 2011, in a joint statement, the States of Guernsey and the Guernsey Financial Services Commission confirmed that it was not Guernsey's intention to seek third country equivalence under the EU Solvency II Directive. Industry groups and trade publications in Guernsey have applauded this strong clarifying statement, coming after what has been a concerted lobbying effort at local level.

Hong Kong

The recent hot air balloon accident in Egypt – which killed nine Hong Kong residents – has sparked public concern over the regulation of the Hong Kong insurance industry. A proposed new regulatory regime, which includes the introduction of a new insurance regulator, aims to bring much-needed protection to policyholders and restore public confidence in the industry.

A recent landmark decision has significantly lowered the net rate of return in personal injury actions and held that different rates should apply to victims of different needs. The ruling is expected to have a far-reaching impact on the assessment of insurance payouts and insurance policy premiums for future personal injury actions in Hong Kong.

A recent Court of First Instance decision has clarified the role that the court plays in a proposed transfer of insurance business from one insurer to another. The fundamental question for the court to consider in such cases is whether the transfer as a whole is fair as between the interests of the different classes of person affected, not whether it represents the best possible option for policyholders.

Hong Kong recently witnessed one of its worst maritime disasters when the collision of a pleasure boat with an island ferry turned what was intended to be a day of celebrations into one of mourning. The tragedy has prompted the government to consider tightening existing maritime safety rules, with proposals that are expected to bring about major changes in insurance for local ships.

The High Court decision in Hua Tyan Development Limited v Zurich Insurance Company Limited confirms that an insurer owes a duty of disclosure to its insured. Since an insurance broker acts as an agent of an insurer, any duty owed to the insured must be performed by the broker as an agent of the insurer and any breach of duty by the broker should also be treated as a breach by the insurer.

The District Court decision in Dah Sing Insurance Services Limited v Singh confirms that the breach of an insurer's reporting obligations breaches not only the insurer's statutory obligations under the Code of Practice for the Administration of Insurance Agents issued by the Hong Kong Federation of Insurers, but also the duty of care owed to the agent in negligence.

More updates >
Show archive >

Hungary

In a recently published interim judgment the Metropolitan Court of Appeal explained the term 'car theft' based on a grammatical interpretation of the insurance company's general business terms. The incident at the centre of the case involved a sham accident: the perpetrators had crashed into the plaintiff's car and when the plaintiff got out to inspect the damage, his car was promptly stolen.

A Hungarian business association recently initiated court proceedings to determine the amount of compensation due to it when a company car was stolen. The Supreme Court ordered the insurer to pay the market value of the vehicle plus value added tax, ruling that any tax benefits available to the plaintiff had no bearing on the performance of the insurance contract.

Hungary's Parliament recently passed a new Insurance Act in order to continue the harmonization of Hungarian legislation with EU law. The act also aims to address the new challenges facing the insurance sector and to coordinate the supervision of financial services.

The new Insurance Act which will soon be adopted was developed in tandem with the industry, resulting in an accomplished piece of legislation which is acceptable to insurance professionals. The act takes account of the practical experiences of the last decade and fully complies with EU law, which will facilitate the entry of Hungarian insurance companies into the single market.

A warehouse owner recently contested a final settlement agreement which it reached with its insurer following fire damage to its property. It argued that the insurer had exploited its financial position and that the agreement was therefore usurious. However, the courts ruled that financial necessity in itself cannot be regarded as sufficient grounds to invalidate a contract.

Under a legal expenses insurance contract, the insurer undertakes to cover the cost of judicial procedures initiated in order to protect the legal interests of the insured. The insurer is entitled to refuse to pay out if the case has little chance of success. Certain legislative measures serve to minimize conflicts of interest in this area.

More updates >

India

It was recently confirmed that an insurer can now raise its equity investment limit to between 12% and 15%. However, private insurers had been hoping for an increase in the investment limit to 20%, as press reports indicate that the Ministry of Finance had allowed the government-owned Life Insurance Corporation of India (LIC) to invest up to 30%. It has been argued that there is one rule for the LIC and another for other insurers.

A slow creep back towards the tariff regime that existed from 1968 onwards has recently been evidenced in certain areas of the Indian insurance market, the most obvious of which is health insurance. The Insurance Regulatory and Development Authority has issued an exposure draft proposing that health insurance be standardised in order to address the expectations of the public "more effectively".

The Cabinet recently approved an increase in the cap on foreign investment in the insurance and pension sectors from the existing 26% to 49%. If the measure is passed, an inflow of fresh capital, an increase in the number of insurance joint ventures and faster development of the market are expected. However, voices of dissent from within both the ruling coalition and the opposition may interrupt its passage through Parliament.

Following detariffication, insurance prices across a number of sectors were freed from regulation. In those classes of business, premiums plummeted as general insurers pushed for a greater market share. At the same time, prices were cut dramatically in lines of business that had traditionally been profitable. Used to seeing these insurers report profits, the Ministry of Finance recently took action.

In Radiant Overseas Pvt Ltd v Insurance Regulatory and Development Authority the Delhi High Court overturned a previous decision which had ordered an Indian travel company which was conducting business on behalf of an Ukrainian insurer, but which was unlicensed for insurance activities, to cease its insurance operations. The court stated that Indian laws cannot be held to apply to insurance businesses outside India.

Further to recent regulatory changes for overseas non-admitted reinsurers, the Insurance Regulatory Development Authority is now reported to be considering further amendments to limit the percentage of premiums ceded by Indian insurers. If the proposed change is implemented, it will result in life insurers having to renegotiate a number of their treaty arrangements with overseas reinsurers.

More updates >

International

Has your company's production been adversely affected by the recent events in Japan? Have you considered whether your insurance policy might respond? What should you bear in mind as you answer these questions? Business interruption policies are designed to provide compensation for losses arising from a disruption in operations attributable to an insured peril.

Ireland

Two recent High Court decisions have provided much-needed clarification as to the scope and operation of Section 62 of the Civil Liability Act 1961. The decisions related to applications by insurers to strike out the claim against them on the basis that no reasonable cause of action was disclosed. Both insurers were successful.

The High Court recently had its first opportunity to consider whether after-the-event insurance policies could effectively substitute security for costs. The ruling demonstrates that the courts will accept after-the-event insurance and will not award security for costs against a plaintiff that has taken out after-the-event cover, provided that policies do not contain terms by which the insurer can avoid liability to pay the defendant's costs.

Show archive >

Israel

Overview
Including: Admitted Companies; Activities of Non-admitted Companies; Restrictions on Holdings of Means of Control; Solvency Control; Liquidation; Banking Organizations in the Insurance Industry; The Agent of the Insurer; The Formation of an Insurance Contract; The Effect of Non-disclosure; Special Elements in Insurance Contract Law; Reinsurance.

The Tel Aviv District Court recently handed down a guiding court decision regarding directors' and officers' policies, in which several important issues relating to the interpretation of liability insurance policies were decided on for the first time. Although the judgment is not a binding precedent, as it was not issued by the Supreme Court, it will act as a guiding decision for the lower courts (which deal with most insurance cases).

The Insurance Contract Law imposes a duty on insurers to highlight exclusions in insurance policies. Failure to act as required may abolish the exclusion. Questions of how an exclusion should be highlighted and whether it was in force were the focus of a recent Nazareth court judgment. The case concerned a council's failure to insure a 10-year-old pupil under a personal accident policy.

Disputes regarding the interpretation of the wording of bankers' blanket bond policies are rarely brought before the Israeli courts. In a recent case, after 23 years of wrangling, the Supreme Court finally issued its judgment on whether such a policy would apply when notification was given after the policy period had expired and a third party discovered the occurrence.

Reinsurers of Israeli insurance companies must put in place a deposit in order to ensure that claims will be paid even if the reinsurer experiences financial difficulties. This requirement poses various questions regarding the status of such deposit, especially in situations where the reinsured enters into liquidation, and whether the reinsurer may offset against a deposit any sums due to the reinsured.

A recent Supreme Court judgment that awarded damages to an insured for consequential loss due to late payment of insurance benefits beyond the policy limit has shaken up the Israeli insurance market. The court ruled for the first time that an insurer that paid the insured on a date later than that set by the Insurance Contract Law, and thus caused a loss of profits for the insured, should pay for said loss.

The acknowledgement by an insurer that the insured has a right to receive insurance benefits may extend the period of limitation. In a recent case before the Haifa Magistrates Court, the court ruled that the insurer's acts constituted an admission of the plaintiff's right to the claim. The limitation period was therefore revised to begin on the date on which the admission was made, instead of the date of the accident.

More updates >

Italy

Overview
Including: Government as Insurer; Private Insurance; Authorization; Regulatory Body; Insurance Contract; Loss Insurance; Life Insurance; Mandatory Insurance

In the context of the liberalisation measures recently adopted by Parliament with a view to increasing competition in the insurance sector, IVASS, the insurance regulator, recently issued a draft order that requires insurers to allow insureds to access information relating to their insurance contracts through dedicated areas on their websites.

A 2012 decree-law includes several new provisions governing third-party liability car insurance. These include the establishment of new terms for the submission of data to the claims database of IVASS (the insurance regulator), the introduction of a new report form for insurers in order to prevent fraud and the insurers' obligation to inform clients of the tariffs of competing companies.

In light of Italy's ratification of the UN Convention on the Rights of Persons with Disabilities, IVASS, the insurance regulator, has issued a letter calling on companies to adjust their health insurance policies with the aim of eliminating discriminatory provisions that limit or prohibit coverage of persons with mental illness or disabilities.

Decree-Law 179 recently introduced important changes to the insurance market, including with respect to compulsory motor liability insurance, insurers' websites, insurance mediation and the statute of limitations. A new law has partially amended the decree-law by reducing the originally planned 10-year term statute of limitations for non-life insurance contracts.

A new law has introduced important changes affecting the insurance market. Among other things, the law provides for a maximum duration for mandatory motor liability insurance policies, mandates that insurers provide up-to-date policy information on their websites and revokes the prohibition against insurance agents entering into cooperation agreements among themselves for insurance mediation.

The insurance regulator, ISVAP, has published amendments to Regulation 20/2008 regarding internal audits, risk management, compliance and outsourcing of insurers' operations. The amendments adjust certain provisions to accord with the International Association of Insurance Supervisors Insurance Core Principle 7 regarding the principles of corporate governance.

More updates >

Mexico

Congress has passed a new insurance and bonding law. The new law is intended to strengthen the insurance and bonding system according to international best standards and practices, with special regard for corporate control and governance, capitalisation rules, reserve investment and risk management policies, among other things.

As a consequence of new regulatory guidelines, Mexican insurers will face tougher new requirements to assist in anti-money laundering activities. Insurers will need to update their internal 'know your client' policies and systems to ensure that they comply with the new requirements.

The National Insurance and Bonding Commission has issued an amendment to the Uniform Insurance Ruling that will require insurers to ensure that service providers hired to sell insurance products comply with the law. Insurers are now required to request evidence from third-party vendors that they have provided proper training for their employees, and that such employees have received certification from the commission.

The National Insurance and Bonding Commission has amended Section 5.1.24 of the Unified Insurance Ruling related to medical expense insurance. The amendment provides clearer guidelines for insurance companies to follow in regard to their medical expense insurance products. It expressly requires insurance companies to draft policies with clarity and legal certainty for the insured.

A package of amendment to various federal laws has given rise to the possibility of filing class actions against insurance companies. These amendments will have a material impact on the conduct of insurance companies in relation to their clients, not only in their promotion, sale and adjustment of insurance, but also in the assessment of coverage policies, as exposure will be increased significantly.

The Unified Insurance Circular has been amended to require insurance companies to submit statistical information about their activities electronically. The aim of the change is to facilitate delivery and improve the Insurance Commission's access to the information submitted by insurance companies for compliance and surveillance purposes.

More updates >

Netherlands

The legislature recently adopted a decree containing rules on the sending of electronic messages in the context of an insurance contract. Although the rules concerning electronic messages by insurers to insureds and other addressees remain virtually unchanged, the new decree no longer contains the requirement of confirmation of receipt. It also stipulates that electronic messages from the insured to the insurer are possible.

The Supreme Court has delivered an important judgment which will have repercussions for the insurance sector concerning loss or damage resulting from a dike shift. The case arose when a municipality sought an order for damages against the Higher Water Board in connection with the loss and damage incurred as a result of a dike failure under Book 6, Section 174(1) of the Civil Code.

The Supreme Court recently considered a key buildings insurance case relating to strict liability in a personal injury claim. The court ruled that an injured third party can sue every owner of a defective structure for the full extent of his or her loss. Where the third party is a joint owner, he or she should bear that part of the loss that corresponds to his or her share in the structure and can claim the remainder as damages.

The Dutch courts recently dismissed a claim relating to theft or embezzlement due to gross negligence, confirming that this also covers an instance of negligence which, in terms of blameworthiness, borders on intent. While the insured in this case was aware of the possibility that his jewellery could be stolen, he nonetheless thought that this would not occur and took wholly inadequate measures to prevent it.

The Supreme Court has recently considered several key insurance cases. In one, when dealing with the issue of mutual recourse between insurers, the Supreme Court assumed that the two insurers were jointly and severally liable for the insurance claim, and that this shared claim had to be divided in proportion to the extent to which the circumstances attributable to it contributed to the claim.

New Zealand

The Insurance Law Reform Act prevents an insurer from relying on an exclusion unless the excluded event contributed to the insured's loss. In the case of an exclusion for admissions by the insured, a recent case shows that if liability can be established without the admissions, the courts will not apply the exclusion if the admissions merely weakened the insurer's bargaining position.

Portugal

As a result of two recent changes, the tax regime on insurance contracts under the EU free provision of services appears to have become more advantageous than the regime applying to contracts under Portuguese law. However, fiscal issues are rarely so simple in Portugal and taxpayers must consider the procedures required to make taxation effective.

Russia

In 2010 the State Duma passed Federal Law 225-FZ on compulsory insurance for owners of hazardous objects. The provisions of the law that regulate the establishment of professional insurers' associations became effective upon the law's publication, while most of the remaining provisions came into force in 2012.

The plenum of the Supreme Court has approved a decree on consideration by the courts of civil cases involving consumer protection disputes. According to Article 2 of the decree, consumer protection legislation will apply to relationships arising from insurance contracts that are not regulated by specific laws, as well as to relationships arising from other financial services and mandatory health insurance.

Legislation issued in 2011 mandated Vnesheconombank, the bank for development and foreign economic affairs, to create a joint stock company to provide insurance services to exporters of Russian goods and investors outside Russia. Since then, the government has taken further steps towards developing export credit and investment insurance against entrepreneurial and political risks.

Having paid the indemnity for cargo loss or damage, insurance companies often face various problems in the course of recovery of subrogation claims. In particular, it is important to be aware that the applicable limitation period may be less than the general limitation period of three years under the Civil Code, and that this period may be further reduced by pre-action time limits.

Debates about the necessity and practicality of certain types of mandatory professional liability insurance are periodically rekindled in Russia. At present, the lack of judicial guidance from the courts has more to do with low demand than with an absence of problems in this area. However, there are reasons to be optimistic about the future of professional liabilty insurance in the Russian market

Defining the limits of a carrier's liability, especially in international transportation, is one of the most important aspects of structuring a relationship between the insured, the insurer and the carrier. However, all too often insufficient attention is paid to the question of how much compensation the insurer can subsequently recover from the carrier.

More updates >
Show archive >

Serbia and Montenegro

The new Insurance Law aims to bring order to the Serbian insurance sector. Among other things, it increases the levels of initial capital required to form insurance companies and affords wide-ranging powers to the supervisory authority, the National Bank of Serbia. However, due to several shortcomings it is unclear whether the law will succeed in attracting foreign investment.

Singapore

The Contracts (Rights of Third Parties) Act 2001 has opened up a statutory avenue for third parties to enforce contracts directly, unless they are excluded from doing so by name, class or description. This update explains its potentially wide-ranging effects on insurance contracts affecting third parties.

A Singapore judge has awarded record damages after finding two doctors guilty of medical negligence in their diagnosis, advice and treatment of a patient. Before providing medical negligence insurance, insurers should make certain that prospective assureds have the requisite skill, experience and training in their areas of practice.

A recent case on appeal found the respondent not liable, as the occupier of a shipyard, for the safety of its workers. The case discusses the broader issues of safety and responsibility, and should be of interest to public-liability insurers.

The role of insurance intermediaries is considered, particularly as insurance transactions are becoming more complex. Determining whether an intermediary is the agent of the insured or the insurer, and the commensurate responsibilities, is a central issue.

A Singapore court recently considered the scope of an insurance policy and whether it covered the plaintiff's liability as the repairer of a vessel when the policy states that it covers the vessel's owner.

This article provides guidelines on how to spot evidence of fraud in fire claims cases. It suggests that a good claims person is one who knows how and when to work with adjusters, forensic scientists and lawyers.

More updates >

Spain

The Supreme Court has clarified the way in which interest accrues against insurers for unjustified late payment of claims. The court ruled that interest shall accrue at the statutory rate increased by 50% from the date of the loss until the end of the second year as of the date of the loss; after the two-year period has expired, interest shall accrue at a rate of 20%.

The legislature has implemented the provisions of the EU Insurance Mediation Directive through the enactment of the Insurance and Reinsurance Mediation Law. The new law is based on three fundamental ideas, including the regulation of new types of insurance intermediary (eg, insurance agents tied to several insurance companies, reinsurance brokers and bank-insurance operators).

Under the new Spanish Insolvency Law, it is not entirely clear whether liquidators and the courts can order the estimation of long-tail claims in insolvent run-offs, and whether doing so obliges the reinsurer to pay in commutation for future liabilities. However, principles of equitable treatment and judicial restraint would seem to prevent the practice.

Draft legislation to implement a number of EU insurance directives has been placed before Congress. The draft seeks to ensure the mutual recognition of reorganization and winding-up measures taken in other EU member states. It also proposes to increase the solvency margin required by insurers and introduces new formal requirements for the distance marketing of insurance products.

Sweden

About 600 insurance mediation companies are registered with the Financial Supervisory Authority (FSA), which believes that existing regulations have made it too easy to enter the insurance mediation market. The FSA is reviewing its regulations, but thinks that a review of statutory requirements is also necessary.

In a recent case the Supreme Court ruled that compensation awarded from industrial injuries insurance should be deducted from compensation awarded from traffic insurance for the same injury. The claimant had already received compensation from the industrial injuries insurance in excess of the amount claimed from the traffic insurance.

After an injury on the way to work, HU claimed and received compensation for permanent disability and disfigurement from her employer's industrial injuries insurance. She also claimed compensation for the same injury from the traffic insurance taken out by the tractor owner based on the fact that she was the victim of a traffic accident. The courts had to decide whether she was entitled to two lots of compensation.

The integrity of insurers' access to and handling of patients' case records has long been questioned. Changes in the Insurance Contract Act, which took effect recently, limit insurance companies' ability routinely to request health information in connection with applications for insurance and ensure that insurance companies may request consent to collect health information only when necessary.

Fraudulent insurance claims create serious and costly problems for European insurance companies. However, efforts by insurers to fight fraudulent claims occasionally go too far. This was the consensus in a judgment handed down by the Svea Court of Appeal, which held that statistical improbability of a car theft was not, per se, sufficient to rebut a claim under a motor policy.

Show archive >

Switzerland

The Federal Supreme Court recently ruled on the applicable prescription period for loss-of-income insurance. The decision clarifies the prescription period regarding the underlying right for this type of insurance with periodic payments. The draft of the revised Insurance Contracts Act suggests that the prescription period should be amended from two years to five years.

The Federal Court recently rendered two decisions in favour of state insurers which hold a monopoly. In its leading case, the court ruled that when insuring buildings under state monopoly, state insurer Glarnersach of Glarus Canton may also compete with private insurance companies. In its second decision, the court dismissed a licence challenge by the Swiss Insurance Association and two private insurers.

The Swiss Financial Market Supervisory Authority (FINMA) recently published for consultation a draft of its new circular that aims to illustrate in detail the provisions of supervisory law regarding risk management by defining principles for reporting on liquidity. FINMA requires that insurers file a liquidity report covering the points raised and the criteria outlined in the circular at least once a year.

The Financial Market Supervisory Authority has proposed a new Insurance Bankruptcy Ordinance and recently commenced the consultation procedure. The purpose of the draft ordinance is to strengthen the rudimentary framework for bankruptcy proceedings. The common legislative intent behind the new legal provisions is the protection of insureds in the case of an insurer's bankruptcy.

Due to a lack of legislation which would effectively protect insureds against unfair terms in general insurance conditions, the Federal Supreme Court has traditionally looked for other means to correct undesired results. The revised Article 8 of the Federal Act Against Unfair Competition, which will soon enter into force, is likely to offer insureds better protection.

The existing Insurance Contract has been in force for over a century, although it has been partially revised several times in that period. A bill to reform the act completely has now been finalised and is awaiting consideration by the the National Council and the Council of States. This update considers the impact that the proposed new act will have on insurance brokers and agents.

More updates >
Show archive >

Taiwan

Taiwan and China have signed the Cross-Strait Economic Cooperation Framework Agreement and the Cross-Strait Intellectual Property Right Protection Cooperation Agreement. In connection with the early harvest lists and the liberalisation of trade rules under the new trade pact, China will allow Taiwanese insurance groups to enter the Chinese market by way of merger or strategic alliance if they satisfy certain conditions.

United Arab Emirates

Cabinet Resolution 42/2009 has been issued to increase the minimum paid-up share capital requirements for insurance and reinsurance companies. The resolution prescribes that UAE or Gulf Cooperation Council (GCC) national individuals, or wholly owned UAE or GCC national legal entities, must hold at least 75% of the share capital of an insurance company which is established in the United Arab Emirates.

According to a recent Federal Supreme Court judgment, insurers would do well to ensure that their adjustment of a claim requires the insured to produce suitable evidence to support the amounts claimed and losses sustained, in order to enhance the prospects of a successful recovery from a third party.

When a non-delivery of cargo claim arises, insurers must be quick to trace the cargo and obtain evidence admissible in the courts. Two recent judgments provide an interesting insight into marine insurance litigation in the United Arab Emirates.

A recent ministerial decision makes changes to UAE laws in relation to the regulation of insurance brokers and their activities, with particular significance for the life insurance industry.

According to a recent ministerial decision, any insurance broker who deals in (or offers) the products of any insurance company that is not registered with the ministry risks having his or her registration cancelled.

Insurers and brokers seeking to write or place business in the United Arab Emirates should ensure that they comply with new legislative changes. While the changes do not go as far as to attribute liability to brokers for unpaid premiums, they do impose various obligations on both insurers and brokers.

United Kingdom

The Court of Appeal recently held that where an assured has incurred mitigation costs for the dual purpose of reducing or avoiding third-party claims of a type covered under the policy and avoiding or reducing a separate risk not covered under the policy, there is no need to apportion the mitigation costs between the two purposes and the assured may instead recover such mitigation costs in full.

Show archive >

USA

JP Morgan is the latest legal instalment concerning the plain and ordinary meaning of the exhaustion requirement contained in an excess insurance policy. While recent case law has served to crystallise the issues concerning the interpretation of underlying exhaustion requirements, the burdens that may be placed on the insured and its underlying insurers have also become more certain.

Directors' and officers' and other liability insurers are concerned about US litigation. Even those insurers focusing on non-US companies must bear in mind the possible extraterritorial reach of US laws. The scope of one such law will soon be addressed by the Supreme Court, whose decision could confirm or remove liability exposure affecting directors, officers and employees of both US and non-US corporations

A district court decision holding the US Army Corps of Engineers liable for certain damages caused by Hurricane Katrina because of its grossly negligent maintenance and operation of a manmade shipping channel is now under appeal. If the government's liability is upheld, insurers who paid claims to their insureds for Hurricane Katrina damages may be able to take action against the government for recovery of the payment.

A New York district court has ruled that a comprehensive general liability policy issued clearly excluded coverage for the claims against the insured. The court concluded that the plaintiff's complaint should be dismissed for failing to state a claim upon which relief could be granted pursuant to Federal Rule of Civil Procedure 12(b)(6).

New York's reputation as a stable insurance market for over 40 years has served to discourage litigation for allegations of bad-faith claims handling by insurers. However, two recent decisions of the New York Court of Appeals mark a decisive change in this landscape and have given insurers cause to take notice.

Many employment practices liability and directors' and officers' liability policies contain Fair Labour Standards Act exclusions that eliminate coverage under the act and a variety of other federal statutes. However, the specific wording of the exclusion in a particular policy is integral in determining whether the exclusion purports to exclude similar and/or related state laws.

Show archive >