Cognosceat emptor: on the insurer’s duty to inform the prospective policyholder in Europe

Abstract

The article addresses the insurer’s duty to inform the prospective policyholder with regard to the European context. The analysis deals with the rules introduced on the matter by Directive 2002/83/EC for life insurance and Directive 92/49/EEC for non-life insurance. The provisions laid down by Directives 2002/65/EC and 2000/31/EC for the cases of distance and electronic insurance sales respectively will be considered as well, along with the requirements set out by Articles 2:201 – 2:203 of the Principles of European Insurance Contract Law.The paper highlights that the insurer’s precontractual information duty is quite highly regulated in Europe. The information requirements set out by Directive 92/49/EEC for non-life insurance, however, are not comprehensive enough and should be aligned with those provided for life insurance, which are more detailed. Further, considering also the precontractual information rules established by the Distance Marketing Directive and the E-Commerce Directive, it emerges that there may be overlapping requirements in the event of distance or electronic insurance selling. Thus, it is advisable to simplify the existing legal framework and to consolidate all the information requirements in a single text applying to insurance dealings, in order to ensure more legal certainty.

Finally, acknowledging the absence of rules at Community level on the insurer’s duty to advise the applicant, the need to introduce European legislation in this respect is emphasized. Where insurance products are not offered through intermediaries, the prospective policyholder may need specific advice to make an informed decision on the policy that he underwrites. In the context of the revision of the Insurance Mediation Directive, the approach of the Commission services that tends in the direction of establishing similar requirements for insurance undertakings and insurance intermediaries, taking into account the specificities of existing distribution channels, should be looked on with favour.