Insurance updates

Austria

Contributed by Schoenherr
New unified cancellation right for insurance contracts brings legal certainty
  • Austria
  • 26 March 2019

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.

FMA publishes new circulars concerning PRIIPS and remuneration policies
  • Austria
  • 13 March 2018

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.


Brazil

Appellate court rules that subrogated insurers assume same rights and limitations as assureds
  • Brazil
  • 16 July 2019

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.

Court finds P&I club not directly and jointly liable for associate shipowners' debts
  • Brazil
  • 21 August 2018

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.


Canada

Contributed by Theall Group LLP
Business interruption insurance resulting from COVID-19 pandemic: what your policy may cover
  • Canada
  • 19 May 2020

In the fight against the COVID-19 pandemic, businesses are closing or restricting their operations across Canada. It is clear is that these measures, although necessary to protect public health, are causing lost revenue and increased expenses. This article provides information on business interruption insurance (BII), which is a common type of commercial property insurance. For many insureds, BII is the coverage most likely to respond to losses resulting from restrictions imposed to fight COVID-19.

Covered for professional fees: let the church say amen
  • Canada
  • 10 March 2020

Some policyholders purchase professional fees coverage as an extension to their insurance policy's general coverage grant to reimburse an insured for the expense of hiring professionals to assist in quantifying a loss and putting a claim together to satisfy an insurer's requirements. In a case concerning a fire at a church, Ontario's Superior Court of Justice addressed who controls the decision of whether such professionals will be retained and have their fees covered by the insurance policy.

Good-faith obligations survive bankruptcy of insured
  • Canada
  • 26 November 2019

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.

Speak now or forever hold your peace: court rejects insurer's attempt to withdraw defence
  • Canada
  • 19 November 2019

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.

Ontario Court of Appeal: insured's failure to provide up-to-date address not breach of duty to cooperate
  • Canada
  • 02 July 2019

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.


Cayman Islands

New opportunities for blockchain use in insurance industry
Ogier
  • Cayman Islands
  • 21 January 2020

It has been more than a decade since blockchain – or distributed ledger technology – appeared on the financial services landscape. Yet, it is still capable of generating excitement as its value in transforming processes continues to develop. As blockchain increases its reach and its impact in specific industries grows, this will generate a need for suitable models of insurance. Cayman-based technology companies have expressed interest in buying insurance from local insurers.


China

Contributed by AnJie Law Firm
Developments and typical disputes regarding D&O insurance in China
  • China
  • 28 April 2020

In early 2020, the Luckin Coffee scandal drew attention from the insurance, legal and security industries and turned the spotlight on directors' and officers' (D&O) liability insurance policies in China. With the developing pace of the security and insurance markets, the refreshed focus on D&O insurance gives Chinese underwriters plenty to contemplate.

Product innovation: litigation property preservation liability insurance
  • China
  • 21 January 2020

In terms of premium revenue, China is the second largest insurance market in the world. However, regulators and insurers are often frustrated due to a lack of insurance innovation. In response to such frustration, litigation property preservation liability insurance has emerged and become a typical insurance solution to satisfy market demand and address unique Chinese insurance requirements in order to align them with the country's judicial system.

Applicability of right of subrogation in Chinese reinsurance context
  • China
  • 07 January 2020

Insurance subrogation is an important legal mechanism which enables insurers to reduce their losses after insurance indemnities are paid. However, opinions differ as to the application of reinsurers' right of subrogation. This article answers questions which frequently arise in this regard from a Chinese perspective.

Have foreign-invested insurer licences been made available to foreign investors?
  • China
  • 16 July 2019

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.

Essential provisions in Chinese reinsurance contracts
  • China
  • 09 July 2019

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.