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18 December 2012
Section 22 of Decree-Law 179, issued on October 18 2012, introduced important changes affecting the insurance market. This update highlights those changes. The changes are subject to ratification by Parliament by December 19 2012; failing ratification by this deadline, they will no longer be applicable.
Section 170bis has been added to the Insurance Code. This new section states that the maximum duration of a mandatory motor liability insurance policy (as well as of any ancillary cover) will not exceed one year, excluding tacit renewal.
Furthermore, the Ministry for Economic Development will specify the contents of standard motor liability insurance contracts based, among other things, on the applicable categories of policyholder.
With a view to facilitating the handling of contractual relationships between insurers and policyholders, the law provides that life and non-life insurance undertakings must implement systems enabling policyholders to access their websites for the purpose of collecting updated information on policies, relevant terms, expiry dates and renewal procedures (among other things).
The law has revoked the provision that prohibited insurance agents, brokers and intermediaries registered under Section D of the Register of Insurance Intermediaries (eg, banks), as well as for those registered in the separate list (European intermediaries), from entering into cooperation agreements among themselves for insurance mediation (even if they registered in the same section of the register), without prejudice to the duty to notify the proposers of their respective roles.
The insurance regulator, IVASS (formerly ISVAP), will implement provisions enacting the law in this respect.
The law has introduced an important change concerning the statutes of limitation applicable to insurance and reinsurance contracts. Rights arising from insurance and reinsurance contracts are now subject to a 10-year statute of limitations from the date on which the cause of action occurred. Rights connected to the payment of premiums remain subject to a one-year statute of limitations.
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