Until 2018, Austria had up to five different cancellation rights for insurance policyholders, plus the cancellation right pursuant to Section 8 of the Distance Financial Services Act. Thus, the legal situation was confusing. However, this has finally changed. Since 1 January 2019, a new Section 5c of the Insurance Contract Act provides for one unified cancellation right.
The Financial Market Authority (FMA) recently published a new circular concerning key information documents for packaged retail and insurance-based investment products. The FMA had already published a revised version of its circular on sound remuneration policies and practices on January 19 2018.
A recent Sao Paulo State Appellate Court case concerned a carriage of goods by sea from Port Everglades (United States) to the port of Rio de Janeiro (Brazil). The court's decision sets an important precedent in recognising that subrogation cannot be used to reinstate a right that no longer applies where a rights holder fails to observe a legal requirement. Therefore, subrogated insurers assume the same rights and limitations as assureds.
The Sixth Civil Chamber of the Rio de Janeiro State Court of Appeals recently decided that a protection and indemnity (P&I) club was not liable for an associate shipowner's debts. In its decision, the court distinguished the P&I club from insurers operating in the Brazilian insurance market. This decision is paramount because it creates an important court precedent regarding P&I clubs' liability for the damages caused to third parties by their associates.
The general position that bankruptcy can substantially vary the rights of insureds has often been argued and rejected. A recent Ontario Superior Court of Justice decision has confirmed that an insurer's duty of good faith is not extinguished on the bankruptcy of the insured.
The Ontario Court of Appeal recently held that an insurer which had defended its insured for 10 months, without a reservation of rights, could not rely on a policy exclusion to withdraw its defence. In this decision, the court did not find it necessary to distinguish between waiver and estoppel. As such, insurers and insureds alike should ensure that they appreciate the potential consequences applicable to both waiver and estoppel and govern themselves accordingly.
The Ontario Court of Appeal recently reconfirmed that an insured's duty to cooperate with defence council appointed by its insurer is not subject to a standard of perfection. This case serves as a strong reminder that a breach of the duty to cooperate must be substantial. It shows that, in practice, without real consequences arising from an insured's conduct, there can be no substantial breach of the duty to cooperate.
A recent Alberta Court of Queen's Bench decision demonstrates that policyholders must carefully consider the interplay between an insurance policy and its endorsements. One consideration is the distinction between endorsements that provide standalone coverage and those intended only to modify an existing policy's terms. However, most important is the overarching principle that any limitations of coverage should be clearly stated.
The Ontario Superior Court of Justice recently concluded that insurance policies should be interpreted differently when multiple insurers are involved. This decision runs contrary to the basic rules of contractual interpretation and conflicts with well-established precedent. If followed, it could lead to commercially unreasonable results and erode the benefits of coverage available to insured parties.
For foreign investors with an eye on the Chinese insurance market, obtaining an insurance intermediary licence is a good idea. However, compared with insurance brokerage licences, insurance agency licences are difficult for foreign investors to obtain. Therefore, foreign investors that wish to acquire control over a Chinese insurer should consider either setting up a new foreign-invested insurer or acquiring an existing foreign-invested insurer.
During the past five years, the Chinese courts and arbitration institutions have handled major disputes relating to reinsurance contracts. These cases prompted legislation in the reinsurance sector and drew attention to the need for more careful wording in reinsurance contracts. This article provides an overview of several essential provisions in reinsurance contracts under Chinese law.
The China Banking and Insurance Regulatory Commission was recently formally unveiled in Beijing, marking the official launch of the new regulatory authority. This merger of the former China Banking Regulatory Commission and China Insurance Regulatory Commission is the biggest reform of China's financial regulatory system in more than 15 years and marks the start of the 'one committee, one bank, two commissions' regulation framework.
The China Banking and Insurance Regulatory Commission plans to abolish two of the requirements that foreign insurance brokerage companies must meet in order to conduct business in China (ie, 30 years of business operation history and $200 million worth of total assets). If this reform takes place, domestic and foreign investors are expected to have equal status when entering the Chinese insurance brokerage market.
Ping An Insurance (Group), a relative newcomer to the insurance industry, now ranks among the world's largest and most valuable insurers. Notably, its use of technology to embrace new business models that supplement its core insurance offerings is indicative of a wider global trend of providing customers with digital, added-value services. However, in China, this evolution towards added-value ecosystem-related services and the potential advantages on offer is marked by a different set of market considerations.
The European Commission recently adopted new rules to help insurers invest in equity and private debt and provide long-term capital financing. As a result of the new rules, insurers will have to hold less capital for investments in equity and private debt, including in small and medium-sized enterprises. The newly adopted rules take the form of a delegated regulation, amend the EU Solvency II Directive and follow on from the mid-term review of the Capital Markets Union Action Plan.