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.
The National Council for Private Insurance – the Brazilian entity in charge of drawing up the country's reinsurance industry policies – recently introduced a series of changes to the regulatory landscape. Such changes aim to enforce the wider liberal agenda set out by the Ministry of the Economy and underline the federal government's commitment to a more liberalised economy.
The Brazilian real has devalued by more than 30% against the US dollar in 2020, making now an attractive time for Brazilian cedants supported by international reinsurers operating in US dollars to settle their claims. One of the salient features of Brazilian insurance claims is the accrual of significant levels of interest and monetary correction (ie, inflation-linked interest), which has the capacity to increase quantum at an alarming rate.
The Alberta Court of Appeal recently addressed a recurring coverage issue: the conflict between the broad protection intended by an 'all perils' property insurance policy and an exclusion for the costs of making good faulty workmanship. Based in part on the general purpose of such insurance, the decision held that property damage directly caused by the faulty workmanship of a contractor was covered, as long as it was outside the scope of work for which the contractor had been hired.
The Alberta Court of Appeal has ordered an insurer to defend claims made against its insured's cold storage business, which was sued when its warehouse thawed and damaged its customer's food products. This case illustrates that it is important to always review a policy's specific words to determine what it covers rather than rely on received wisdom about what a policy typically covers.
In a recent case, the Ontario Court of Appeal addressed three important elements of the duty to defend where there is concurrent coverage under two policies – namely, whether there was a concurrent duty to defend given the existence of an 'other insurance' clause, the obligation to pay ongoing costs and its allocation and the right to participate in the defence.
The Ontario Superior Court of Justice recently held that an insurer which wrongfully denied a US$121 million claim must pay pre-judgment interest based on the actual cost of borrowing and not the rates stipulated in the Courts of Justice Act. Counsel and adjusters would be wise to carefully consider this case in any future insurance coverage dispute, as it sets out a number of factors that a court could consider in deciding whether to award commercial interest rates.
An Ontario judge recently interpreted a data exclusion in favour of the insureds, ordering the insurer to defend claims arising out of an alleged website security breach. This case reaffirms the principle that exclusions are to be read narrowly, not broadly. Particularly where the relevant policy provisions engage complex issues not yet judicially considered, the court may err on the side of finding for the insured.
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.
Foreign insurers cannot directly sell insurance products in China unless they have successfully established a joint venture or wholly foreign-owned enterprise (WFOE) insurer in mainland China. In light of Shenzhen's recent pilots and reforms, it is now the most favourable destination for foreign insurers seeking to establish a WFOE in mainland China.
Despite the tortuous path ahead for the US election campaigns and the trials and tribulations of 2020, the US-China Phase One Trade Deal remains in place. As China begins to further open its financial market, foreign insurance institutions (FIIs) may be wondering whether non-US FIIs have any chance of benefiting from China's treatment of US insurers. If only US insurers benefit, would that be a Global Agreement on Trade in Services (GATS) violation or would it be GATS compliant?
The rapid spread of the COVID-19 pandemic has affected business operations worldwide. For many companies, business interruption (BI) as a result of the pandemic is one of the greatest operational risks of 2020. Although many companies are insured against BI, their coverage may not extend as far as they believe. For example, compensation under a BI policy is often based on the condition that damage to property has occurred. This article sheds some light on this rule.
It is no secret that China's insurance industry presents good upside growth opportunities and China's insurtech market continues to grow rapidly. Foreign insurers are currently underrepresented in this market, even as former market barriers to entry continue to fall. This market presents great potential for foreign insurers, and Western insurers in particular have centuries of experience to share with their Chinese counterparts.
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.