Principles of European Insurance Contract Law (PEICL) · 2018-12-16 · Principles of European Insurance Contract Law (PEICL) Prepared by the Project Group Restatement of European

Principles of European Insurance Contract Law

(PEICL)

Principles of European Insurance Contract Law

(PEICL)

Prepared by the Project Group

Restatement of European Insurance Contract Lawestablished by Fritz Reichert-Facilides † Chairman: Helmut Heiss

Edited by the Drafting Committee:Jürgen Basedow, John Birds, Malcolm Clarke, Herman Cousy, Helmut Heiss in co-operation with Leander D. Loacker

ISBN (print) 978-3-86653-069-0ISBN (eBook) 978-3-86653-853-5

The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available on the Internet at http://dnb.d-nb.de.

© 2009 by sellier. european law publishers GmbH, Munich.

All rights reserved. No part of this publication may be reproduced, translated, stored in a retrie-val system or transmitted, in any form or by any means, electronic, mechanical, photo-copying, recording or otherwise, without prior permission of the publisher.

Design: Sandra Sellier, Munich. Production: Karina Hack, Munich. Typesetting: fidus Publika-tions-Service GmbH, Nördlingen. Typeface: Goudy Old Style and Goudy Sans from Linotype. Printing and binding: Friedrich Pustet KG, Regensburg. Printed on acid-free, non-ageing paper. Printed in Germany.

fidus Publikations-Service{Sellier}PEICL_InsuranceGroup/daten_3b2/PEICL_titelei.3d 20.7.2009 15:03:56 Insgesamt 68 Seiten 1. Lauf

Table of Contents

Our Sponsors xxxi

Preface xxxiii

Members of the Group xxxv

Members of the Drafting Committee xxxvii

List of Rapporteurs xxxix

Publications on the PEICL xli

Introduction xlix

Principles of European Insurance Contract Law (PEICL):Rules 1

Principles of European Insurance Contract Law (PEICL):Rules, Comments and Notes 27

Part One:Provisions Common to All Contracts Included in the Principlesof European Insurance Contract Law (PEICL)

Chapter One:Introductory Provisions

Section One: Application of the PEICL

Article 1:101: Substantive Scope of Application

CommentsSubstantive Scope: Substantive Private Insurance Contract Law 29Mutual Insurance 29Social Insurance Law 29Law of Insurance Supervision and Other Public Law on Insurance 30

v


International Insurance Contract Law (Conflict of Laws) 30Law of Insurance Intermediaries 30Marine Insurance 31Reinsurance 31

NotesApplication to Private Insurance Contracts 31Mutual Insurance 32Marine Insurance 32Reinsurance 32Other Specific Branches of Insurance 33

Article 1:102: Optional Application

CommentsBasic Principle 33Legal Nature of Opting-in 33Priority over Conflict Rules 34Domestic Insurance Contracts 34No Partial Choice 35Effect on Intermediaries 35

Note 35

Article 1:103: Mandatory Character 36

CommentsFocus on Mandatory Law 38Technique 39

NotesMandatory Acts 40Single Mandatory Provisions 40Minimum Protection Acts 41Single Minimum Protection Provisions 41Beneficiaries of Mandatory and Minimum Protection Rules 42

Article 1:104: Interpretation

CommentsThe Objective 43Interpretation and Development 44Textual Interpretation 44Context 44

Chapter One: Introductory Provisions Table of Contents

vi


Good Faith and Fair Dealing 44Certainty in Contractual Relationships 45Uniform Application 45Protection of Policyholders 45

Note 46

Article 1:105: National Law and General Principles

CommentsBasic Principle 46Mandatory National Provisions 46Supervisory Law 47Internationally Mandatory Provisions 47Exceptional Recourse to Mandatory National Provisions 47Filling Gaps 48General Principles of Contract Law 48

Note 48

Section Two: General Rules

Article 1:201: Insurance Contract

CommentsInsurance Contract 49Insured Event 50Indemnity Insurance 50Insurance of Fixed Sums 50

NotesThe Pros and Cons of Defining the Insurance Contract 51Standard Elements of Definitions of the Insurance Contract 51The Insurers Obligation 52Uncertain Event 52Definitions of Other Terms 52

Article 1:202: Further Definitions

CommentsIntroduction 53Insured 53Beneficiary 54Person at Risk 54

Table of Contents Chapter One: Introductory Provisions

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Victim 54Insurance Agent 54Premium 55Contract Period 55Insurance Period 55Liability Period 56

Note 56

Article 1:203: Language and Interpretation of Documents

CommentsRelationship to the Principles of European Insurance Contract Law 56Transparency 57Language of Documents 57Sanctions 58

NotesTransparency 58Language 59In dubio contra stipulatorem 59

Article 1:204: Receipt of Documents: Proof

Comments

NotesGeneral Law of Evidence 60Specific Rules of Insurance Law 60

Article 1:205: Form of Notice

CommentsConsensual and Formal Contracts 61Proof 62Notice 62Persons Favoured 62No Particular Form Being Required 62Notices by the Insurer 63

NotesCommunity Law 63The Kind and Context of the Notice 64General Principle: No Formal Requirements 64

Chapter One: Introductory Provisions Table of Contents

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An Example: Notice of an Insured Event 65

Article 1:206: Imputed Knowledge 65

CommentsThe Issues 66Imputation and Agency 66Persons Whose Knowledge May Be Imputed 66

NotesGeneral Law of Agency 67Specific Provisions for Insurance Contracts 67Knowledge of the Policyholders Agent 67When Policyholder and Insured are Not Identical 68

Article 1:207: Non-Discrimination

CommentsInsurance and Discrimination 69Equal Treatment of Men and Women 70Non-discrimination on Grounds of Nationality, Racial or Ethnic Origin 71Sanctions 72Burden of Proof 72

Note 72

Section Three: Enforcement

Article 1:301: Injunctions

CommentsEnforcement of Mandatory Rules by Injunction 73Measures by Qualified Entities 74

NotesBackground in Community Law 74Implementing Provisions 74

Article 1:302: Out-of-court Complaint and Redress Mechanisms

CommentsOut-of-court Complaint and Redress Mechanisms under National Law 75Relationship to the Principles of European Insurance Contract Law 75

Table of Contents Chapter One: Introductory Provisions

ix


Note 76

Chapter Two:Initial Stage and Duration of the Insurance Contract

Section One: Applicants Pre-contractual Information Duty

Article 2:101: Duty of Disclosure

CommentsInformation Imbalance 77The Timing of the Duty 77Questionnaires 78Relative Knowledge 78Inside Knowledge: The Alter Ego 78Outside Knowledge: The Knowledge of Agents 79Enquiry or Investigation 79

NotesSurvey 80Duty of Spontaneous Disclosure 80Duty to Answer the Insurers Questions 81Approximation 81

Article 2:102: Breach 81

CommentsRemedies Available to Insurers 82Termination (Article 2:102 paras. paras. 2 (second sentence), 3 and 4) 82Variation (Article 2:102 para. 2) 82Notice (Article 2:102 para. 2) 83Discharge (Article 2:102 para. 5) 83

NotesThe All-or-Nothing Principle 83The Proportional Reduction of the Insurance Money 84Approximation 85Innocent Breach 85

Article 2:103: Exceptions

CommentsUnanswered Questions 86Immaterial Information 86

Chapter Two: Initial Stage and Duration of the Insurance Contract Table of Contents

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The Reasonable Insurer 87Waiver 87Information Known to Insurers 87Effects of the Exceptions 88

NotesObvious Defects of the Policyholders Answer, Article 2:103(a) 88Immaterial Information, Article 2:103(b) 88The Insurers Knowledge and Behaviour, Article 2:103(c) and (d) 89

Article 2:104: Fraudulent Breach

CommentsThe Range of Remedies 89The Impact of Fraud 89Avoidance 90The Position of Policyholders 90

Notes 91

Article 2:105: Additional Information

Comments 91

Note 91

Section Two: Insurers Pre-contractual Duties

Article 2:201: Provision of Pre-contractual Documents 92

CommentsPre-contractual Documents in General 93Duty to Provide an Applicant with a Pre-contractual Document 93Pre-contractual Documents in Special Branches of Insurance 93Right to a Copy of the Completed Documents 93Form of Documents 94

Notes 94European Directives and their Implementation 94The Kind of Information to be Given 95Stricter Requirements under National Laws 95Information Duty Drafted in General Terms 95Application Form Provided by the Insurer, Article 2:201 para. 3 95

Table of Contents Chapter Two: Initial Stage and Duration of the Insurance Contract

xi


Article 2:202: Duty to Warn about Inconsistencies in the Cover

CommentsGeneral Remarks 96Duty to Assist the Applicant 96Consequences of Failure to Assist 98Damages 98Termination 98

NotesCommunity Law 99National Law 99Sanctions 100

Article 2:203: Duty to Warn about Commencement of Cover

CommentsProblems of Commencement of Cover in Practice 101Duty to Warn 101

NotesCommunity Law 101The Sanction of Immediate Cover 102Incomplete and Unclear Sanctions 102

Section Three: Conclusion of the Contract

Article 2:301: Manner of Conclusion

CommentsThe Principles of European Contract Law 103Agreement 103Ways of Concluding an Insurance Contract 104Insurance Contract 104Mandatory Character 105Proof 105

NotesA Matter of General Contract Law 105Consensual Contract 106


xii


Article 2:302: Revocation of an Application for Insurance

CommentsAn Application for Insurance 107Revocation by the Applicant 107Time for the Arrivals of Revocations and Acceptances Sent Electronically 107Effectiveness of Revocation 108

NotesThe Roles of Offeror and Offeree 109The Binding Nature of an Offer 109

Article 2:303: Cooling-off Period 110

CommentsIntroduction 111Structure of the Rule 111Avoidance 111Commencement of the Cooling-off Period 111Timeliness of Notice to Withdraw 112The Exceptions to the General Rule 112

NotesCommunity Law 113Implementation for Life Assurance and Similar Products 114General Right of Withdrawal 114Exception for Short-Term Insurance Contracts 114Exception for Prolongation of Pre-Existing Contracts 115Exception for Preliminary Cover 115

Article 2:304: Abusive Clauses 115

CommentsUnfair Contract Terms Directive (93/13/EEC) 116Persons Protected under Article 2:304 116Core terms 116Individually Negotiated Terms 117Fairness Test 118Grey List 118Sanctions 118Burden of Proof: Unfairness 119

NotesImplementation of EC Law 122Additional and Broader Provisions on the Fairness of Insurance Terms 123


xiii


Absence of Specific Judicial Review 124Non-Negotiated Contracts, Article 2:304 paras. 1 and 4 124Exceptions from Judicial Review, Article 2:304 para. 3 125Consequences of Invalidity of a Clause, Article 2:304 para. 2 125

Section Four: Retroactive and Preliminary Cover

Article 2:401: Retroactive Cover 125

CommentsIssues of Risk 126Knowledge of the Insurer 126Knowledge of the Policyholder 126

NotesGeneral Permission for Retroactive Cover 127Sector-Specific Permission for Retroactive Cover 128

Article 2:402: Preliminary Cover

CommentsPreliminary Cover 129Evidencing the Preliminary Cover 129Exclusion of Articles 2:201 to 2:203 130

NotesSurvey 130Form and Information Requirements: Germany, Greece 130France 131Belgium 131Luxembourg 132United Kingdom 132Terms of the Cover Note 132

Article 2:403: Duration of Preliminary Cover

CommentsDuration of the Preliminary Cover 133

NotesGermany 134France 134


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Section Five: Insurance Policy

Article 2:501: Contents

CommentsInsurance Policy 135Evidence 135Parol Evidence Rule 136Preliminary Insurance Contracts 136

NotesIssue of a Document 136Information to be Provided -Detailed Requirements 136Mixture: General Provision with Some Details 137Means of Proof 137Constitutive Effect 138Issue of General Contract Terms 138Cover Notes 138Written Form 138

Article 2:502: Effects of the Policy

Comments 139

NotesLegal Presumption of Approval 140Term for Contradiction 140Preconditions for Presumption 141Signature as Means of Protection 141Legal Presumption of Contract in Accordance with Application 141

Section Six: Duration of the Insurance Contract

Article 2:601: Duration of the Insurance Contract

CommentsComparative Survey 142Structure of the Rule 143Duration of the Contract Period 143Effects of Violation 144Personal Insurance 144

NotesMaximum Period 144Personal Insurance 145


xv


Article 2:602: Prolongation

CommentsThe Need for Prolongation 146Prolongation and Renewal 146Adjustment of Contract 147Form of Notice 147Term of Notice 147

NotesStatutory and Contractual Prolongation 148Period of Prolongation 148Prolongation and Renewal 149

Article 2:603: Alteration of Terms and Conditions 149

CommentsThe Need for a Rule for Alteration 150The need for a special rule for insurance contracts 150The Concept Underlying Article 2:603 150Minimum Standards for an Alteration Clause 151

NotesArticle 2:603 para. 1 151Article 2:603 para. 1(a) – Commencement of Alteration 152Article 2:603 para. 1(b) – Notice 152Article 2:603 para. 1(c) – Right of Termination 152

Article 2:604: Termination after the Occurrence of an Insured Event

CommentsThe Need for Termination 153Statutory and Contractual Rights to Terminate 153Time Limits 153Other Rights to Terminate 154

NotesArticle 2:604 para. 1 154Article 2:604 para. 2 – Reasonableness 155Article 2:604 para. 3 – Expiration of the Right of Termination 155Article 2:604 para. 4 – End of Cover 155


xvi


Section Seven: Post-contractual Information Duties of the Insurer

Article 2:701: General Information Duty

CommentsThe Need for Information During the Period of Insurance Cover 156Information to Be Given in All Cases 157Information about Changes in the Contract 157Updating Information 157Manner of Communication 157

NotesSurvey 158Life Assurance Directive 158Legal Expenses Insurance Directive 159Further Post-Contractual Information Duties under National Law 159

Article 2:702: Further Information upon Request

CommentsPurpose 160Limits 160Information on Changes in Standard Terms of Insurance 161Manner of Communication 161Remedies 161

Note 161

Chapter Three:Insurance Intermediaries

Article 3:101: Powers of Insurance Agents

CommentsLegal and Contractual Authority of the Insurance Agent 162Minimum Authority 163Imputation of the Agents Knowledge 163Liability of the Agent 163

NotesFirst Sentence of Article 3:101 para. 1 – Statutory Powers 164Second and Third Sentences of Article 3:101 para. 1 – Contractual Limitations 164Article 3:101 para. 2 – Minimum Powers 164Article 3:101 para. 3 – Imputation of the Agents Knowledge 165

Table of Contents Chapter Three: Insurance Intermediaries

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Article 3:102: Agents of Insurers Purporting to be Independent

CommentsRationale 166Scope 166Actual Authority of Pseudo-brokers 166

Note 167

Chapter Four:The Risk Insured

Section One: Precautionary Measures

Article 4:101: Precautionary Measures: Meaning

CommentsGeneral Remarks 168The Concept of Precautionary Measure 169

NotesGeneral Remarks 169Finland and Sweden 170Austria, Germany, Switzerland 170United Kingdom 170France 170Belgium, Luxembourg and the Netherlands 171Spain 171Poland 171Greece 171

Article 4:102: Insurers Right to Terminate the Contract

CommentsTermination and Non-Prolongation 172Termination under Other Provisions 172Manner of Termination 172

NotesIpso iure Avoidance or Declaration of Termination 173Termination ex tunc or ex nunc 173Causation: France and United Kingdom 173Causation in Other Member State Laws 174Fault: France, the Netherlands and United Kingdom 174Fault: Other European Laws 174

Chapter Four: The Risk Insured Table of Contents

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Written Notice and Time Limits 175End of Cover 175National Peculiarities 175

Article 4:103: Discharge of the Insurers Liability

CommentsGeneral Remarks 176Causation 176Fault 176

NotesGeneral Remarks 177Causation 177France 177United Kingdom 178Italy 178Belgium and Luxembourg 178Austria and Germany 178The Netherlands 178Further Objective Elements 179Fault 179Germany 179Finland 179Austria 180Belgium and Luxembourg 180

Section Two: Aggravation of Risk

Article 4:201: Clauses Concerning Aggravation of Risk

CommentsAllocation of Risk 181The Need for Rules of Law 181Aggravation of Risk 182Clauses 182

NotesInformation Requirements 182Material Aggravation of Risk 183Aggravation Specified in the Contract 183

Table of Contents Chapter Four: The Risk Insured

xix


Article 4:202: Duty to Give Notice of an Aggravation of Risk 183

CommentsThe Need for Notification 184The Manner of Notification 184Breach 184

NotesNotice in Reasonable Time 185Insurers Duty to Pay Insurance Money 185

Article 4:203: Sanctions 185

CommentsReconsideration of the Risk by Insurers 186Time for Policyholders to Find Alternative Cover 186Discharge 186

NotesExpiry of Cover 187Discharge 187

Section Three: Reduction of Risk

Article 4:301: Consequences of the Reduction of Risk

CommentsPurpose and Scope 188Materiality 189Policyholders Initiative 189

NotesReduction of the Premium 189Termination of Contract 190Exceptions for Personal Insurance 191

Chapter Five:Insurance Premium

Article 5:101: First or Single Premium

CommentsScope of Regulation 192Regulatory Approach 192

Chapter Five: Insurance Premium Table of Contents

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First and Single Premium 193Prerequisites for Giving Effect to a Condition Which is Subject to Article 5:101 194Consequences of Payment or Non-Payment within the Two Week Period 194

NotesPostponement of Cover 195Protection of the Applicants Expectations 195

Article 5:102: Subsequent Premium

CommentsScope of Regulation 196Regulatory Approach 197Subsequent Premium 197Prerequisites for Giving Effect to a Clause which is Subject to Article 5:102 197Consequences of Payment or Non-Payment within the Period of Grace 197

Notes 198

Article 5:103: Termination of the Contract

CommentsScope of Regulation 199Regulatory Approach 200Termination in Case of Non-Payment of a First or Single Premium 200Termination in Case of Non-Payment of a Subsequent Premium 200Notice of Termination 201Effects of Termination 201Automatic Termination 201

NotesArticle 5:103 para. 1: The Right to Terminate 201Form of Termination 202Article 5:103 para. 2 203

Article 5:104: Divisibility of Premium

CommentsThe Principle 203Abolition of a Principle of Indivisibility of Premium 203

Notes 204

Table of Contents Chapter Five: Insurance Premium

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Article 5:105: Right to Pay Premium

CommentsObligation of the Insurer to Accept Payment 205Consent of the Policyholder 205Legitimate Interest of Third Party 206

Notes 206

Chapter Six:Insured Event

Article 6:101: Notice of insured event

CommentsChannels of Communication 207Balancing Interests 207Notice Periods 208Contents of the Notice 208Breach of Duty 209

NotesArticle. 6:101 para. 1: Duty to Notify 209Who Owes The Duty to Notify 209Article 6:101 para. 2: Time Allowed for Notification 210Contractual Derogations 210Article 6:101 para. 3: Sanction – Reduction of Insurance Money 211Contractual Arrangements 211

Article 6:102: Claims Cooperation 212

CommentsInformation about the Occurrence of the Insured Event 213Reasonable Requests 213Breach of Duty 213

NotesArticle 6:102 para. 1: Duty to Cooperate 214Article 6:102 para. 2 and 3: Sanctions 214

Chapter Six: Insured Event Table of Contents

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Article 6:103: Acceptance of Claims

CommentsSettlement 215Prompt Settlement of Claims 215

Notes 216

Article 6:104: Time of Performance 216

CommentsThe Importance of Performance 217Undue Delay 217The Amount Payable 217

NotesArticle 6:104 para. 1 and 3: Rules on the Time of Payment 217Article 6:104 para. 2: Partial Payment 218

Article 6:105: Late Performance

CommentsCompensation 219Damages 220The Conceptual Basis of Liability 220Assessment of Loss 220Instances of Loss 221

NotesGeneral Rules on Interest 221Specific Interest Rules for Insurance Law 221Punitive Interest Rates 222

Chapter Seven:Prescription

Article 7:101: Action for Payment of Premium

Comments 223

NotesCommunity Law 223General Rules for All Claims Arising from Insurance Contracts 223Specific Rules on Prescription of Premiums. 224

Table of Contents Chapter Seven: Prescription

xxiii


General Rules of the Law of Prescription 224Comparison of Prescription Periods 224

Article 7:102: Action for Payment of Insurance Benefits

CommentsGeneral Period of Prescription and its Commencement 225Absolute Period of Prescription and its Commencement 226

NotesIntroduction 226A Single Rule without Any Requirement of Knowledge 227A Double Standard: Knowledge plus Time 227The Insurers Decision on the Claim as Starting Point of Prescription 228The Duration of the Prescription Periods 228Exception for Life Assurance Contracts 229

Article 7:103: Other Issues Relating to Prescription

CommentsPrescription of Claims Not Covered by Article 7:101 and 7:102 229Unregulated Iissues of Prescription 230Contractual Derogations 230

NotesGeneral Remark 230Contractual Derogation 230Suspension in Case of Negotiations 231Suspension when Notice or Claim is Lodged 231Additional Reason for Suspension or Renewal 231

Part Two:Provisions Common to Indemnity Insurance

Chapter Eight:Sum insured and Insured Value

Article 8:101: Maximum Sums Payable

CommentsThe Indemnity Principle and the Sum Insured 233Mitigation Costs 234The Sum Insured 234Valued Policies 234

Chapter Eight: Sum insured and Insured Value Table of Contents

xxiv


NotesThe Indemnity Principle 234Value Agreements 235Effect of Value Agreements 235Fraud or Misrepresentation on the Part of the Insured 236

Article 8:102: Underinsurance

CommentsBasic Principle: First Loss Cover 236Permitted Derogation: Proportionate Recovery 237Alternative Remedies 237

NotesThe Principle of Proportionate Reduction 237Exceptions 238Contractual Derogations 238

Article 8:103: Adjustment of Terms in Case of Overinsurance

CommentsBasic Principle: Adjustment of Terms 239Overinsurance caused by Multiple Insurance 239Determination of Insurance Money 239Alternative Remedies 239

NotesGeneral 240The Claim for Reduction, Article 8:103 para. 1 240Termination, Article 8:103 para. 2 240

Article 8:104: Multiple Insurance

CommentsBackground 241Key Elements of Multiple Insurance 241The Insureds Choice 242Contributions by Different Insurers 243

NotesGeneral 243Indemnity Principle, Article 8:104 para. 1 244Full Liability of Each Insurer, Article 8:104 para. 2 244Recourse against Other Insurer(s), Article 8:104 para. 3 245

Table of Contents Chapter Eight: Sum insured and Insured Value

xxv


Chapter Nine:Entitlement to Indemnity

Article 9:101: Causation of Loss

CommentsLimits on Recovery of Indemnity 246Intention 246Recklessness 247Failure to Avert or Mitigate 247Duty and Causation 247The Persons Prohibited 248

NotesSurvey 248Intention and Gross Negligence, Article 9:101 para. 1 248Intention and Recklessness of Third Parties 249Contractual Derogations in Case of Negligence 250Failure to Avert and Mitigate Loss, Article 9:101 para. 3 250

Article 9:102: The Costs of Mitigation

CommentsEstablishment of a Right to Recover Certain Costs 251Scope of the Right of Recovery 252Underinsurance 252

NotesGeneral 252Reasonable Mitigation Costs, Article 9:102 para. 1 253The Sum Insured as Limit, Article 9:102 para. 2 254

Chapter Ten:Rights of Subrogation

Article 10:101: Subrogation

CommentsIntroduction 255Need for Indemnity 256Protection for Insurer 256Third Party 257Protection of Third Parties in a Close Relationship with the Insured 257

Chapter Nine: Entitlement to Indemnity Table of Contents

xxvi


NotesGeneral 258Basic Principle, Article 10:101 para. 1 258Protection of Subrogation Rights, Article 10:101 para. 2 258Protection of the Insureds Entourage, Article 10:101 para. 3 259No Subrogation Rights Against the Insured, Article 10:101 para. 4 260

Chapter Eleven:Insured Persons other than the Policyholder

Article 11:101: Entitlement of the Insured

CommentsConcept 261Protection of the Insured and Scope 261Basic Rule 261Other Third Party Claims 262Revocation of Cover 262Form of Notice 263Effects of Revocation 263

NotesArticle 11:101 para. 1: General Principle 263Artikcle 11:101 para. 2: Revocation 264Acceptance 264Insurance for Whom It May Concern 265

Article 11:102: Knowledge of the Insured

CommentsRationale 265Relation with Article 1:206 266Elements of the Rule 266Legal Consequences 267

NotesImputation to the Policyholder 267Direct Notification Duties of the Insured 268

Article 11:103: Breach of Duty by One Insured

CommentsRationale and Purpose 268

Table of Contents Chapter Eleven: Insured Persons other than the Policyholder

xxvii


Scope: the Policyholder as an Insured 269Scope: Group Insurance 269Relation to Article 1:206 270Legal Consequences 270Joint Insurance 271

Note 271

Chapter Twelve:Insured Risk

Article 12:101: Lack of Insured Risk

CommentsStructure and Position of the Rule 272Non-existence of Insured Risk 272Cessation of Insured Risk 273Transfer of Title 273

NotesGeneral 274Initial Absence of Risk, Article 12:101 para. 1 274Subsequent Cessation of Risk, Article 12:101 para. 2 275

Article 12:102: Transfer of Property

CommentsThe Need for a Rule concerning Transfer of Property 275The Underlying Concept 276Non-Mandatory Character of the Rule 276Scope of Application 277Inapplicability to Transfer of Title by Inheritance 277The Fiction of an Insurance Contract for the Benefit of a Third Party 277

NotesGeneral 277The Termination Approach, Article 12:102 para. 1 278The Substitution Approach 278Transferable Insurance Policies 279Passing of Insurance Cover, Article 12:102 para. 2 279Exceptions, Article 12:102 para. 3 279

Chapter Twelve: Insured Risk Table of Contents

xxviii


Part Three:Provisions Common to Insurance of Fixed Sums

Chapter Thirteen:Admissibility

Article 13:101: Insurance of Fixed Sums

Comments 281

NotesGeneral 282Content 282Relationship to Personal Insurance 283

Principles of European Insurance Contract Law (PEICL):Translations (non-authentic)

Czech versionZásady Evropského Pojišovacího Smluvního Práva (ZEPSP) 287

Dutch versionPrinciples of European Insurance Contract Law (PEICL) 312

French versionPrincipes du Droit Européen du Contrat d’Assurance (PDECA) 340

German versionGrundregeln des Europäischen Versicherungsvertragsrechts (GEVVR) 366

Greek version`æå��ı ¯ıæø�ÆØŒ�ı ˜�ŒÆØ�ı �Å� `�çÆºØ��ØŒÅ� �ı��Å� (A¯˜`�) 394

Hungarian versionAz Európai biztosítási szerzodési jog alapelvei (EBSJA) 422

Italian versionPrincipi di Diritto Europeo del Contratto di Assicurazione (PDECA) 448

Polish versionZasady europejskiego prawa ubezpieczen (ZEPU) 474

Portuguese versionPrincípios do direito europeu do contrato de seguro (PDECS) 502

Table of Contents Chapter Thirteen: Admissibility

xxix


Slovak versionZásady Európskeho Práva poistnej Zmluvy (ZEPPZ) 528

Spanish versionPrincipios de Derecho Europeo del Contracto de Seguro (PDECS) 554

Swedish versionPrinciper För En Europeisk Försäkringsavtalsrätt (PEFAR) 581

Annexes

Abbreviations 609

Table of National Statutes 612

Table of EC Legislation 621

Table of International Conventions and Model Laws 626

Table of Cases 627

Bibliography of Works Cited 631

Chapter Thirteen: Admissibility

xxx


Our Sponsors

The Project Group is very grateful for many years of essential financial support by thefollowing institutions:

Österreichischer Fonds zur Förderung der wissenschaftlichen Forschung (FWF)Deutsche Forschungsgemeinschaft (DFG)

Being part of the CoPECL Network established by the European Commission the Groupalso acknowledges financial assistance granted by the Commission in the years 2005-2009.

In addition, the Group is indebted to the many institutions whose support made possible25 workshops across Europe.



Preface

This volume contains the “Principles of European Insurance Contract Law (PEICL)”produced by the Project Group “Restatement of European Insurance Contract Law”.The Project Group started its work in September 1999. It joined the European Networkof Excellence on European Contract Law (CoPECL), which was set up by the EuropeanCommission in 2005, and drafted its Principles as a contribution to the Common Frameof Reference of European Contract Law. However, the PEICL go beyond a Frame of Re-ference and are intended to provide a Draft Optional Instrument of European InsuranceContract Law.

The founding father and first chairman of the Project Group, the late Professor FritzReichert-Facilides, University of Innsbruck, died in 2003. His academic life was stronglydevoted to comparative and especially European insurance contract law. It is a source ofgreat satisfaction to the Members of the Project Group to be able to present the com-pleted Principles of European Insurance Contract Law as Fritz Reichert-Facilides wouldhave wanted them to be.

We owe thanks to the publisher, sellier.elp Munich, for high quality service in the pro-duction of the present book. The Project Group’s assistants have prepared the layout ofthe book. In this respect, we want to express our gratitude especially to Dr. MarleneDanzl, Ms. Mandeep Lakhan, Mr. Manuel Sacchetto and Mr. Golo Wiemer.

Cambridge, Hamburg, Innsbruck/Zurich, Leuven, Manchester

June 2009

xxxiii



Members of the Group

Prof. Dr. Dr. h.c. Jürgen Basedow, LL.M.Max-Planck-Institut für ausländisches undinternationales Privatrecht, Hamburg

Prof. Dr. Juan Bataller GrauUniversidad Politécnica de Valencia

Prof. John BirdsUniversity of Manchester

Prof. Dr. Zdzisław BrodeckiUniwersytet Gdansk[Member from April 2001-March 2007]

Prof. Dr. Diana CeriniUniversità degli Studi di Milan-Bicocca

Prof. Dr. Malcolm A. ClarkeUniversity of Cambridge, St. John’sCollege

Prof. Dr. Herman CousyKatholieke Universiteit Leuven

Prof. Dr. Bill W. DufwaStockholms Universitet

Dr. Dariusz FuchsUniwersytet Kardynała S. Wyszynskiego,Warszawa

Prof. Dr. Helmut Heiss, LL.M. (Chairman)Universität Zürich

Prof. Dr. Jérôme KullmannUniversité Paris Dauphine

Adv. Dr. Jorge Pegado LizLisboa/Bruxelles

Prof. Dr. Jaana Norio-TimonenHelsingin Yliopisto

Prof. Dr. Fritz Reichert-Facilides, LL.M. (†)Universität Innsbruck[Founder and Chairman from September1999 – October 2003]

Prof. Dr. Ioannis RokasOIJOMOLIJO PAMEPIRSGLIO

AHGMXM

A. Prof. Dr. Bernhard Rudisch, LL.M.Universität Innsbruck

Prof. Dr. Anton K. Schnyder, LL.M.Universität Zürich

tit. Prof. Dr. Peter TakátsEötvös Loránd Tudományegyetem,Budapest

Prof. Dr. Pedro Pais de VasconcelosUniversidade de Lisboa

Prof. Dr. Manfred WandtUniversität Frankfurt a. M.

Prof. Dr. J. Han WansinkErasmus Universiteit RotterdamUniversiteit van Leiden

xxxv



Members of the Drafting Committee

Head


Members

Prof. Dr. Dr. h.c. Jürgen Basedow, LL.M.Max-Planck-Institut für ausländisches undinternationales Privatrecht, Hamburg


Prof. Dr. Herman CousyKatholieke Universiteit Leuven

Prof. John BirdsUniversity of Manchester

Prof. Dr. Helmut Heiss, LL.M.Universität Zürich

Prof. Dr. Fritz Reichert-Facilides, LL.M. (†)Universität Innsbruck

Committee Secretary

Dr. Leander D. LoackerUniversität Zürich

xxxvii



List of Rapporteurs

Article 1:101 Substantive Scope of Application Reichert-Facilides, HeissArticle 1:102 Optional Application BasedowArticle 1:103 Mandatory Character Reichert-Facilides, HeissArticle 1:104 Interpretation BasedowArticle 1:105 National Law and General Principles BasedowArticle 1:201 Insurance Contract Reichert-Facilides, Heiss,

Norio-TimonenArticle 1:202 Further Definitions GroupArticle 1:203 Language and Interpretation of Documents Basedow, HeissArticle 1:204 Receipt of Documents: Proof BasedowArticle 1:205 Form of Notice BasedowArticle 1:206 Imputed Knowledge ClarkeArticle 1:207 Non-Discrimination BasedowArticle 1:301 Injunctions Adelmann, HeissArticle 1:302 Out-of-court Complaint and Redress Mechanisms HeissArticle 2:101 Duty of Disclosure Clarke, RudischArticle 2:102 Breach Clarke, RudischArticle 2:103 Exceptions Clarke, RudischArticle 2:104 Fraudulent Breach Clarke, RudischArticle 2:105 Additional Information Clarke, RudischArticle 2:201 Provision of Pre-contractual Documents HeissArticle 2:202 Duty to Warn about Inconsistencies in the Cover HeissArticle 2:203 Duty to Warn about Commencement of Cover HeissArticle 2:301 Manner of Conclusion DufwaArticle 2:302 Revocation of an Application for Insurance DufwaArticle 2:303 Cooling-off Period SchnyderArticle 2:304 Abusive Clauses Adelmann, DufwaArticle 2:401 Retroactive Cover HeissArticle 2:402 Preliminary Cover HeissArticle 2:403 Duration of Preliminary Cover HeissArticle 2:501 Contents HeissArticle 2:502 Effects of the Policy HeissArticle 2:601 Duration of the Insurance Contract BasedowArticle 2:602 Prolongation BasedowArticle 2:603 Alteration of Terms and Conditions WandtArticle 2:604 Termination after the Occurrence of an Insured Event BasedowArticle 2:701 General Information Duty WandtArticle 2:702 Further Information upon Request WandtArticle 3:101 Powers of Insurance Agents Heiss, LorenzArticle 3:102 Agents of Insurers Purporting to be Independent Heiss, LorenzArticle 4:101 Precautionary Measures: Meaning Basedow, Wansink

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Article 4:102 Insurer’s Right to Terminate the Insurance Contract Basedow, WansinkArticle 4:103 Discharge of the Insurer’s Liability Basedow, WansinkArticle 4:201 Clauses Concerning Aggravation of Risk ClarkeArticle 4:202 Duty to Give Notice of an Aggravation of Risk ClarkeArticle 4:203 Insurer’s Right to Terminate the Insurance Contract ClarkeArticle 4:301 Consequences of the Reduction of Risk Clarke, TakatsArticle 5:101 First or Single Premium HeissArticle 5:102 Subsequent Premium HeissArticle 5:103 Termination of the Contract HeissArticle 5:104 Divisibility of Premium HeissArticle 5:105 Right to Pay Premium HeissArticle 6:101 Notice of Insured Event Bataller GrauArticle 6:102 Claims Cooperation Bataller GrauArticle 6:103 Acceptance of Claims Bataller GrauArticle 6:104 Time of Performance Bataller GrauArticle 6:105 Late Performance Bataller GrauArticle 7:101 Action for Payment of Premium Heiss, KullmannArticle 7:102 Action for Payment of Insurance Benefits Heiss, KullmannArticle 7:103 Other Issues Relating to Prescription Heiss, KullmannArticle 8:101 Maximum Sums Payable Cerini, Clarke, HeissArticle 8:102 Underinsurance Clarke, TakatsArticle 8:103 Adjustment of Terms in Case of Overinsurance Clarke, TakatsArticle 8:104 Multiple Insurance Birds, TakatsArticle 9:101 Causation of Loss ClarkeArticle 9:102 The Costs of Mitigation ClarkeArticle 10:101 Subrogation BirdsArticle 11:101 Entitlement of the Insured Rokas, BasedowArticle 11:102 Knowledge of the Insured Rokas, BasedowArticle 11:103 Breach of Duty by One Insured Rokas, BasedowArticle 12:101 Lack of Insured Risk Heiss, LoackerArticle 12:102 Transfer of Property Heiss, LoackerArticle 13:101 Insurance of Fixed Sums Heiss

List of Rapporteurs

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