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

Contributed by Kincaid | Mendes Vianna Advogados
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
Ontario court rejects well-established rules for interpreting insurance policy exclusions
  • Canada
  • 14 May 2019

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.

Injury claim between cohabiting family covered by homeowner's policy despite household exclusion
  • Canada
  • 07 May 2019

An Ontario court recently found that a personal injury claim by a daughter against her mother was covered by homeowner's insurance. While the insurance policy contained an exclusion for claims arising from injury to "any person residing in [the] household", the court concluded that the daughter was a tenant under the policy and therefore the exclusion did not apply. This case serves as a reminder that policyholders' intentions when purchasing insurance can be critically important.


China

Contributed by AnJie Law Firm
Who is China's new insurance regulator?
  • China
  • 18 June 2019

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.

Insurance brokerage market further opened up to foreign investors
  • China
  • 11 June 2019

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.

Shift towards digital insurance and its regulation
  • China
  • 02 October 2018

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.

Rise of private health insurance: challenges and opportunities
  • China
  • 17 July 2018

Despite a range of stakeholders having vested interests in developing the private health insurance market, it has remained underdeveloped and is generally considered by Chinese insurers to be unprofitable compared with life insurance lines. Insurers have also found it hard to stimulate uptake by a consumer base that is relatively unfamiliar with the added value of such products. As such, the Chinese health insurance market is not as mature, innovative or profitable as it could be.

How can foreign-invested insurers apply new CIRC regulation by reference?
  • China
  • 17 April 2018

The China Insurance Regulatory Committee recently promulgated the new Measures for the Administration of Equity in Insurance Companies, which state that if the shareholding proportion of an insurer's foreign shareholders accounts for more than 25% of its registered capital, the relevant provisions of the measures must be applied by reference. This express inclusion of foreign-invested insurers represents a substantial shift away from current practice.


European Union

Changes to Solvency II make it easier for insurers to invest in economy
DLA Piper Studio Legale Tributario Associato
  • European Union
  • 04 June 2019

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.