I INTRODUCTION

The framework conditions for insurance and reinsurance companies in the European Economic Area (EEA) and therefore also in Austria have changed fundamentally in recent years.

Many parallel developments are affecting insurers: increased insurance regulation, the effects of the persistent low interest rate environment, climate change, demographic change, the increasing availability of data and information (big data), the legitimate need of insurance customers for more transparency and comparability between the products and, finally, as this chapter is being finalised (March 2020), the developing covid-19 pandemic. All of this will probably boost digitalisation efforts of all market participants.

Nevertheless, 2019 was a good year for Austrian insurance undertakings.

The premium volume in 2019 was €17.56 billion (16 per cent of premiums go to reinsurance), consisting of €9.83 billion in property and casualty insurance, €5.40 billion in life and €2.33 billion in health insurance. Austria's insurers booked €15.02 billion in expenses for insurance claims (payments and provisions for outstanding claims), which was an increase of 6.59 per cent.

While the number of court cases in various non-litigious matters outside the insurance industry has increased dramatically in recent years, overall civil litigation declined. The reduced number of insurance disputes was one of the main drivers of this multicausal phenomenon.

In 2018 and 2019, the Supreme Court passed about 20 headline decisions on insurance law. Lower courts saw a significant number of litigation about 'eternal' cancellation rights due to ECJ C-209/12 Endress.

II REGULATION

The Austrian Financial Market Authority (FMA) is the national competent authority for insurance and reinsurance undertakings. Before pursuing contractual insurance activities within the territory of Austria, local and third-country insurers and reinsurers are required to obtain a licence from the FMA. Insurance undertakings holding a licence from another Member State of the EEA can operate in Austria under the single licence principle. Such insurers do not require an additional Austrian licence and may conduct insurance business on a freedom of services basis or by establishir8ng a branch in Austria. Nevertheless, EEA insurance companies must notify the competent supervisory authority in their home country before initiating insurance business in Austria.

The FMA may request information from insurance and reinsurance undertakings about any business activity issues as well as the presentation of relevant documents at any time and determine the manner in which these documents must be presented (Section 272 of the Austrian Insurance Supervision Act 2016 (VAG 2016)).

The FMA may, in order to ensure insurance marketing activities are conducted in a lawful manner, at any time request information from insurance undertakings and other intermediaries, in particular any information regarding contracts that are held by intermediaries or regarding contracts that are entered into with third parties and may inspect such information on site.

III INSURANCE AND REINSURANCE LAW

i Sources of law

The Austrian Insurance Contract Act (VersVG) is the primary legal source for private insurance. It has been in force since 5 April 19592 and originally mirrored the German Insurance Contract Act (VVG). That changed in 2008 when Germany passed its VVG reform. Nevertheless, many German court decisions, commentaries and scholarly writings, in particular those dating before 2008, are still considered as also being relevant in Austria.

After its enactment, the VersVG remained in force in its original form for over 30 years and was first amended in 1994 in preparation for Austria's accession to the EU.3 It contains provisions on both property and life insurance but excludes maritime insurance and reinsurance. Maritime insurance is set out in the Austrian Commercial Code but hardly ever concluded under Austrian law. Reinsurance contracts are governed by civil law provisions only. Other primary legal sources of Austrian insurance contract law are the general policy conditions as well as any agreements made between the parties, including special legal regulations such as the Motor Vehicle Liability Insurance Act 1994 and the Compensation for Traffic Victims Act.

An Austrian peculiarity is that information obligations are not part of insurance contract law but of the supervisory laws (VAG 2016). This system allows the FMA to pass regulations that set out information obligation in more detail. So far, the FMA has issued regulations with respect to life and health insurance.

Other sources of law relevant for structuring insurance products are the Consumer Protection Act (KSchG), the Remote Financial Services Act and provisions of the Austrian General Civil Code (ABGB) of 1811. Last but not least, all relevant EU regulations (mainly the PRIIPs Regulation) are of course also directly applicable in Austria.

Neither the VersVG nor the VAG 2016 define the term 'insurance'. Following the example of Germany, the Austrian legislature has deliberately omitted to include such a legal definition and still leaves the definition of the term to the jurisdiction.4

For large risks within the meaning of Article 7 Paragraph 2 Rome I, the VAG 2016 regulations on product governance do not apply (Section 129 Paragraph 7 VAG 2016). Further, there are exceptions to the general information obligations (Section 130 Paragraph 4 VAG 2016) and the consultation prior to the submission of the contractual declaration in the case of the sale of large risks (Section 132 Paragraph 1 VAG 2016). Additionally, the obligations regarding product information are limited for the insurance of major risks (Section 133 Paragraph 2 VAG 2016).

ii Making the contract

The insurance contract is concluded by the submission of concordant declarations of the insurer and policyholder. Consent to the contract must be free, serious, definite and understandable. The 'overall scheme' of the regulations of an insurance contract determines whether it is an insurance contract within the meaning of the VersVG.5 According to the prevailing view, the essential ingredients of an insurance contract are (1) bearing of risk by the insurer, which may not be a mere ancillary benefit of another contract; (2) covering a respective 'need' of the policyholder; (3) providing a legal claim of the policyholder to the insurance benefit; (4) the existence of a risk collective and calculation according to the law of large numbers in the sense of assuming the risk of the occurrence of an uncertain event; and (5) the premium.6

The information obligations and rules of conduct of insurers are set out in Sections 128–136 VAG 2016, which are intended to ensure that policyholders receive all product-specific contractual documents (e.g., insurance terms and conditions, product information). With respect to life and health insurance, special regulations by the FMA set out more detailed information obligations.7 The form in which insurance undertakings must convey pre-contractual information is primarily paper, unless agreed otherwise. Provisions for electronic information or information via a website are slightly different than those set out for PRIIPs KIDs in Article 14 of the PRIIPs Regulation 1286/2014. In addition, insurers and policyholders may agree on electronic communication (in practice, via email), which, if sent, is deemed to have been received by the policyholder (Section 5a VersVG). This provision is a unique tool for insurers to make sure they can prove that policyholders received communication sent to them.

Under the widely used 'application model' customers apply for the conclusion of the insurance contract and insurers accept these offers by sending the policy within six weeks. The contracting parties are in principle free to choose the content of the insurance contract. However, this freedom is limited by the general civil law regulations, especially in terms of possibility and permissiveness according to Section 879 ABGB. For example, insurance against fines is deemed void pursuant to Section 879 Paragraph 1 ABGB, but precedents on this are old. It therefore remains to be seen whether Austrian courts will accept insurance against fines under the EU General Data Protection Regulation.

Since 2019, a new Section 5c VersVG has established a uniform cancellation right for policyholders within 14 days (in the case of life insurance within 30 days) without giving reasons (Section 5c Paragraph 1 VersVG). Annex 1 to the VersVG provides for model cancellation information which, if used, is deemed to be sufficient information about the cancellation right.

The insured must notify the insurer of all circumstances known to him or her that are substantial to the assumption of the risk when concluding the contract (Section 16 VersVG). Substantial are those circumstances that are likely to influence the insurer's decision to conclude the contract at all or to conclude it under the agreed terms. In case of doubt, a circumstance that the insurer has asked for explicitly and in written form is considered to be substantial. In assessing whether there has been a breach of an obligation to notify, an overall view must be taken. The objective suitability of a risk circumstance to influence the insurer's decision to conclude a contract is important.8 If, contrary to this provision, a significant circumstance is not notified, the insurer may revoke the contract within one month (Section 16 Paragraph 2 VersVG). The insurer may also revoke from the contract if an incorrect notice has been given about a substantial circumstance (Section 17 Paragraph 1 VersVG). The cancellation period starts as the insurer becomes aware of the breach of the duty of disclosure (Section 20 Paragraph 1 VersVG).

Obligations as prerequisites to be fulfilled for a policyholder's claim to insurance cover must be expressly agreed. The agreement in the general terms and conditions is sufficient but the insurer can only derive rights from the negligent breach of an agreed obligation if the policyholder has previously received the insurance conditions or another document in which the obligation is communicated (Section 6 Paragraph 5 VersVG).

A distinction is made between obligations to be fulfilled before and after the insured event. However, only the culpable breach, whereby slight negligence is sufficient, of an obligation to be fulfilled before the insured event leads to the insurer's exemption from liability and entitles the insurer to terminate the contract within one month of becoming aware of the breach without complying with a period of termination (Section 6 Paragraph 1 VersVG). In the case of obligations that must only be fulfilled after the occurrence of an insured event, the insurer shall only be released from its duty to provide insurance coverage in the event of an intentional or grossly negligent breach of the obligation. If the obligation is not breached with the intention of influencing the insurer's duty to provide insurance cover or of impairing the determination of such circumstances which are recognisably significant for the insurer's duty to provide cover, the insurer remains obliged to provide cover insofar as the breach has had no influence on the determination of the insured event or on the determination or the scope of the cover incumbent on the insurer (Section 6 Paragraph 3 VersVG).

Furthermore, in the event of a breach of an obligation intended to maintain the equivalence between risk and premium on which the insurance contract is based, the agreed freedom from insurance coverage only applies to the extent that the agreed premium is lower than the premium provided for in the tariff for the higher risk. In the event of a breach of obligations relating to other mere reports and notifications that have no influence on the insurer's assessment of the risk, indemnification shall only be granted if the obligation has been breached intentionally (Section 6 Paragraph 1a VersVG).

An agreement according to which the insurer shall be entitled to revoke the contract in the event of a breach of an obligation is invalid (Section 6 Paragraph 4 VersVG).

Insurers must send a signed document of the policy to the policyholder on paper or, as a result of an agreement on electronic communication according to Section 5a VersVG, by email. If the insurance contract relates to a life, occupational disability or pension insurance, the insurance certificate must also be sent on paper. The current Austrian government's plan is to further facilitate electronic communication between insurers and policyholders – it remains to be seen whether this will happen soon.

Policyholders can at any time request copies of the declarations made with regard to the policy and they can also ask for a copy of the policy against payment of a fee (Section 3 VersVG).

Claims for insurance benefits become statute-barred within three years of their due date (Section 12 Paragraph 1 VersVG). In connection with life insurance contracts, the Austrian Supreme Court ruled that the ancillary service claim according to Section 3 VersVG exists at any time during the contract and after its termination until complete settlement (i.e., until there is legal certainty that no more claims can be asserted from the insurance contract).

iii Interpreting the contract

The ABGB contains the essential provisions on contract law, whereas the KSchG provides for special rules for consumer contracts. These provisions are of central importance when interpreting insurance contracts as well as the general terms and conditions.

Further to the Austrian Supreme Court, the following rules apply:

  1. the interpretation must take into account a 'reasonably circumspect policyholder';
  2. clauses of general terms and conditions of insurance contracts must be interpreted objectively (i.e., without taking into consideration the subjective intentions of the insurer or the policyholder) and the interpretation of such clauses must be limited to their wording, unless they were the subject and result of contract negotiations;
  3. the purpose of a clause that is discernable for an objective observer must always be taken into consideration;
  4. clauses limiting the insured risk therefore are invalid insofar as one cannot expect a policyholder without legal education to understand them; and
  5. clauses that are unclear from an objective perspective have to interpreted as a reasonably circumspect policyholder must have understood them. In case of uncertainties they have to be interpreted to the detriment of the insurer.

The result of such interpretation is subject to additional legal scrutiny as several provisions in the ABGB limit the validity of clauses: ancillary clauses (i.e., all the 'small print'), which are disadvantageous for the insured and which a reasonable reader would not have to expect at the place where they are written do not become part of the contract (Section 864a ABGB). In addition, all provisions except the main subject matter of the insurance contract are null and void if they are grossly detrimental to the policyholder (Section 879 Abs 3 ABGB). The Austrian Supreme Court has a quite narrow view on what forms the main subject matter of the contract, thus enabling it to basically verify almost all clauses and whether they are grossly detrimental, including all provisions modifying the premium. For example, in several decisions, the last one in 2019,9 the Supreme Court held that a clause linking the premium and the amount insured in legal cost insurance to the consumer price index is null and void because it leads to a constant increase of the premium for the benefit of the insurer. Although this has been widely criticised among legal scholars, it remains to be seen whether the Supreme Court will change its view. In another 2019 decision,10 however, the Court upheld the indexation of premiums in endowment life contracts.

In consumer contracts, provisions must also meet the transparency requirement (Section 6 Paragraph 3 KSchG). The average consumer must be able to understand the content and the consequences of all clauses, including their economic consequences – a task not easy to fulfil. And, further to ECJ C-260/18 Dziubak, it has become even more questionable whether invalid clauses can be replaced by anything else (e.g., supplementary rules of Austrian law, supplementary interpretation of the contract, etc.). Utmost scrutiny of the wording and knowledge of the vast amount of Austrian Supreme Court cases on transparency is therefore necessary when designing new products for the Austrian market.

iv Types of terms in insurance contracts

If the risk situation at the time of the conclusion of the contract increases to the disadvantage of the insurer, the insured must notify the insurer (Sections 6 and 23 VersvG). If the increase in risk lies within the responsibility of the insured, the insurer is entitled to avoid coverage and may cancel the contract. An increase in risk due to negligent omission of the insured may also allow the insurer to take these actions. Changes that are not relevant for the risk assessment also have to be notified to the insurer (e.g., change of address for contents insurance).11 Another typical obligation of the insured in damage insurance is the obligation to keep the damage as low as possible (Section 62 VersVG).

General terms and conditions sometimes contain clauses that refer to exclusions of risk which are to be considered as 'hidden' obligations. However, the decisive factor is not the name but whether the clause contains an individualised description of a particular risk or whether it requires a certain preventive behaviour from the insured to keep insurance cover.12 For example, the Austrian Supreme Court qualified in legal expenses insurance policy a clause according to which the insurance company in principle pays the costs in a covered claim only from the time when the insured requests cover, as a hidden obligation.13

v Intermediaries and the role of the broker

Insurance distribution is defined in Article 137 Paragraph 1 of the Austrian Trade Act (GewO) as:

  1. advising, proposing or carrying out other preparatory work for the conclusion of insurance contracts;
  2. concluding insurance contracts or assisting in their administration and performance, in particular in the event of a claim;
  3. the provision of information on one or more insurance contracts based on criteria chosen by a customer via a website or other media, and the establishment of a ranking of insurance products, including a comparison of prices and products, or a discount on the price of an insurance contract, where the customer can directly or indirectly conclude an insurance contract via a website or other media; or
  4. the activities referred to in (a) to (c) in respect of reinsurance contracts.

Insurance distribution in Austria is a regulated profession for which a certificate of competence is required (Article 94, 137 GewO). Insurance intermediaries must be registered with the trade register by the administrative district authority (Article 365a Paragraph 1 and Article 365b Paragraph 1 GewO). Except for bancinsurance, supervision of intermediaries is therefore not a competence of the FMA but of 106 local authorities.

Insurance distribution may be carried out by 'insurance agents' (Article 43 VersVG) or 'brokers' (Article 26 of the Austrian Brokers Act (MaklerG)).

Insurance agents are constantly entrusted by the insurer to mediate or conclude insurance contracts (Article 43 VersVG). An agent and all declarations made by an agent are therefore attributed to the the insurer.

The broker, on the other hand, is not constantly entrusted by one or more insurers to mediate or conclude insurance contracts and is not in any economically 'close relationship' to the insurer. Despite working for both parties, the broker must predominantly protect the interests of the insurance client and is also considered to be within the sphere of his or her responsibility (Article 27 Paragraph 1 MaklerG).

Insurance intermediaries must declare if they act as an insurance agent or broker (status transparency). They are also obliged to ensure that the insurance customer is given the required information upon conclusion of an insurance contract and, if necessary, upon changes or renewals of the contract (Article 137f Paragraph 8 GewO). The insurance intermediary must fulfil his or her duties to provide information before any contract declaration by the insurance customer is given.

vi Claims

The insured must notify the insurer immediately on the occurrence of an insured event (Article 33 VersVG).

An immediate notification in accordance with Austrian insurance law is given if sent 'without undue delay'. It is also regularly contractually agreed that a breach of the notification duty releases the insurer from its coverage obligation. However, the insurer remains obliged to grant coverage if the policyholder proves that he or she was not at fault or in proving that he or she only breached the obligation through slight negligence (Article 6 Paragraph 3 sentence 1 VersVG).

If the insured breached his or her duty through gross negligence or with 'plain' intent, the insurer remains obliged to grant coverage insofar as the breach has had no influence on the determination of the insured event or on the determination or the scope of coverage. Only if the policyholder breaches an obligation with the intent to manipulate the evidence after the insured event occurred (dolus coloratus) is the insurer entirely released from its coverage obligation.

The insurer may demand that the policyholder provides all information necessary to determine the insured event or the extent of the insurer's obligation to grant cover (Article 34 VersVG). The obligation to provide information and evidence is an obligation of the policyholder, who must inform his cor her ontractual partner about all circumstances necessary for the determination of the insured event and the scope of the insurance benefit in good faith in order to enable the contractual partner to examine the claim – also in good faith – and to make the decisions necessary for the fulfilment of the contract. The principle of good faith, therefore, is an important cornerstone in Austrian insurance law.

Unjustified rejections of claims may lead to coverage claims against the insurer which have to be filed within one year after denial of coverage.

The insurer may set off any premium claims due or any other claim to which he or she is entitled under the policy from any coverage claims payable under the insurance policy, even if the insurer owes coverage not to the policyholder but to a third party (Article 35 lit b VersVG). The insurer may therefore set off claims against every third claimant to the same extent as the insurer would be able to offset against the policyholder if the latter claimed coverage.

For indemnity insurances, the insured's claim against a third party is by law transferred to the insurer to the extent the insurer compensates the insured's loss (Article 67 VersVG). If the insured abandons the claim for compensation against the third party or a right serving to secure it, the insurer is not obliged to indemnify insofar as he or she could have obtained compensation from the claim or the right. Against members of the policyholder's family living in the same household as the policyholder, the insurer may only take recourse if the claim for compensation is caused intentionally.

IV DISPUTE RESOLUTION

i Jurisdiction, choice of law and arbitration clauses

Article 11 clause 1 Regulation (EU) No. 1215/2012 sets out that an insurer domiciled in a Member State may be sued: (1) in the courts of the Member State in which he or she is domiciled; (2) in another Member State, in the case of actions brought by the policyholder, the insured or a beneficiary, in the courts for the place where the claimant is domiciled; or (3) if he or she is a co-insurer, in the courts of a Member State in which proceedings are brought against the leading insurer.

Disputes arising out of insurance matters are subject to ordinary jurisdiction (Section 1 Austrian Jurisdiction Standard (JN)). In the case of a dispute between a consumer and an insurer as entrepreneur, the Austrian district courts have jurisdiction as to the substance of the matter up to an amount in dispute of €15,000; above that amount, the Austrian regional courts have jurisdiction (Sections 49 and 50 JN). The local jurisdiction is based on the defendant's domicile or seat (Sections 65 and 66 JN). Disputes arising from business-related transactions belong to the independent commercial courts, if the subject of the dispute exceeds the amount of €15,000 in money or monetary value, if the claim is directed against an entrepreneur registered in the Commercial Register and the transaction on the side of the defendant is a business-related transaction (Section 51 JN).

If an insurance agent mediated or concluded the contract, Section 48 VersVG sets out that the court in whose district the insurance agent had his or her place of business or residence at the time of mediation or conclusion of the contract is competent for actions against the insurer arising from the insurance relationship.

An agreement of domestic jurisdiction according to Section 104 Paragraph 1 JN is only effective for disputes that have already arisen; the absence of domestic jurisdiction, however, heals according to Section 104 Paragraph 3 JN.

Arbitration clauses are only used in marine insurance and reinsurance contracts.

Alternative dispute resolution, especially meditation, is just starting to develop in Austria and usually on an ad hoc basis.

ii Litigation

In the event that an insurance intermediary was involved in the conclusion of an insurance contract, the court in the district in which the intermediary had his or her commercial branch office or (in the absence thereof) his or her residence at the time of the conclusion of the contract is competent for disputes arising from the insurance relationship (Section 48 VersVG). In all other cases, the general rule of Austrian law applies, according to which the court in district in which the defendant has his or her residence or seat is competent.

District courts have jurisdiction for claims of up to €15,000. Regional courts are competent for higher amounts in dispute.

In general, the Austrian civil procedure system provides a three-tier ligation structure with two levels of appeal. After the court of first instance (i.e., either a district or regional court) has decided, an appeal against the judgment may be lodged either to the regional court (against the district court decision) or the higher regional court (against regional court decisions). The court of last resort is the Austrian Supreme Court. According to Section 502 of the Austrian Code of Civil Procedure, an appeal against the judgment of the court of appeal is only admissible if the judgment depends on the resolution of a question that is of considerable importance for maintaining legal unity, legal certainty or legal development, for example because the court of appeal departs from the case law of the Supreme Court or because such case law is absent or inconsistent. The admissibility of an appeal to the Supreme Court also depends on the amount in dispute; claims below €5,000 are generally (apart from some exceptions) not admissible.

Evidence is taken by the court of first instance. The main rule in Austrian civil procedure law is that each party bears the burden of proof regarding the applicability of the legal provisions most favourable for them. While the Austrian Code of Civil Procedure does not limit the means of evidence, the most common ones are: documents, witness statement, party examination and expert opinions.

The decision on costs is rendered together with the decision on the merits. In general, the Austrian Code of Civil Procedure provides that the losing party has to reimburse the winning party for all costs. The costs are calculated according to the tariffs set out in the Attorney Tariffs Act and can be lower than the fees agreed upon between the attorney and the client. Austrian law prohibits contingent fees in form of quota litis agreements.

iii Arbitration

The Austrian Arbitration Law Reform Act 2006, which came into force on 1 July 2006, supported Austria in becoming an even more arbitration-friendly jurisdiction. However, regarding insurance-related matters, arbitration is still no real alternative to civil litigation as it is not applicable for consumer business.Arbitration clauses are only used in commercial and industrial insurances policies and in reinsurance policies between insurance carriers. The same applies to mediation.

iv Alternative dispute resolution

With the Alternative Dispute Resolution Act (AStG), the Austrian legislature has transposed the Alternative Dispute Resolution Directive (ADR Directive, RL 2013/11/EU) as well as certain aspects of the Regulation on Online Settlement of Consumer disputes (ODR Regulation, VO (EU) 524/2013) into national law.

Pursuant to Article 1 Paragraph 1, the AStG is applicable to 'proceedings for the alternative settlement of disputes concerning contractual obligations arising from sales or service contracts between a company established in Austria and a consumer resident in Austria or elsewhere in the European Union . . . before the bodies for alternative dispute resolution'.

Article 4(1) lists the competent ADR centres. These are all external bodies that do not deal with complaints (expressions of dissatisfaction) from policyholders but are intended to arbitrate disputes that have already arisen.

Insurers are subject to extensive information obligations regarding alternative dispute resolution. These information obligations are regulated in Article 19 AStG. Pursuant to Article 19 AStG, insurers are subject to general information duties and, in certain cases, special information duties.

Pursuant to the general information duties, insurers must inform the policyholders in a clear, comprehensible and easily accessible manner, on the company's website (if available) and, where appropriate, in the general conditions or (if there are neither websites nor terms and conditions) in brochures, leaflets or contractual documents on the relevant ADR units and their websites, if the company is obliged (or has undertaken) to use the relevant ADR methods to resolve disputes with consumers.

Additionally, in the case of online contracts, the information must be published pursuant to the ODR Regulation.

Pursuant to the special information duties, and in addition to the general information duties, the insurer must inform the policyholders (or beneficiaries) each time a dispute arises resulting from a policyholder's complaint that has not been acted upon by the entity, in written form, in German (or in another language at request of the policyholder), on paper or another durable medium, about the relevant ADR methods and their websites, provided that the company is obliged (or has undertaken) to use the relevant ADR methods to resolve disputes with consumers, and whether the company will participate in the proceedings. (In the case of life insurance, this also applies to complaints by beneficiaries.)

V YEAR IN REVIEW

The Austrian legislature was quite active in 2019 regarding the insurance industry. One of the most important legal innovations was Regulation BGBl II No. 162/2019, which introduced rules of professional conduct for insurance mediation, which are intended to implement the EU Insurance Distribution Directive.

The following two decisions were particularly noteable:

  1. ECJ C-355/18 Rust Hackner, originating from Austrian cases, will be relevant for all insurance policies in the EEA. The ECJ answered five questions regarding cancellation of life insurance contracts as follows:
    • The period for exercising a cancellation right cannot begin to run if the policyholder has not received any information about its existence.
    • Only incorrect information that deprives the policyholder of the possibility of exercising the cancellation right under substantially the same conditions as if the information was correct leads to an indefinite period to exercise the cancellation. That is for the national court to determine.
    • Cancellation is also permissible after surrendering the contract.
    • The claim from a cancellation may not generally be limited to what the beneficiary would receive in the case of an ordinary termination of the policy (i.e., the surrender value).
    • National legislatures may provide for limitation of the claim for interest from the cancellation if this does not affect the validity of the policyholder's cancellation right.
  2. In connection with the obligation for insurers to retain and hand over documents of insurance contracts, Austrian Supreme Court Case No. 7 Ob 221/17a ruled that the ancillary service claim according to Section 3 VersVG exists at any time until no more claims can be asserted from the insurance contract. Therefore, the insurer must fulfil its obligation to provide ancillary benefits in good faith in accordance with Section 3 VersVG in the event of a known unclear legal situation at least until clarity is created by law or case law, or both. The insurer must enable the policyholder to maintain their own legal position, for which knowledge of the documents mentioned in Section 3 VersVG may be a prerequisite. This is the case, for example, with late cancellation in the life insurance sector.

VI OUTLOOK AND CONCLUSIONS

The developing covid-19 pandemic will certainly be the main issue for insurers in 2020: maintaining services in times of restricted access to public areas, working from home and still selling products are key challenges. This and other pandemic-related questions (e.g., lack of cover in business interruption policies and legal cost insurance) will unfortunately, but still most likely, overshadow all other ongoing developments.


Footnotes

1 Peter Konwitschka and Manuela Zimmermann are partners, Marguerita Sedrati-Müller is counsel, and Natascha Garo, Daniel Höhnl, Sebastian Jackwerth-Feige, Daniel Lackner, Caroline Lichtenberg and Julia Peric are senior associates at Schönherr Rechtsanwälte GmbH.

2 Bundesgesetz über den Versicherungsvertrag (Versicherungsvertragsgesetz 1958), BGBl 1959/2.

3 BGBl 90/1993.

4 Fletzberger in Korinek/G. Saria/ S. Saria, VAG § 1 rec. 5.

5 Fenyves in Fenyves/Schauer VersVG § 1 rec. 7.

6 Fenyves in Fenyves/Schauer VersVG § 1 rec. 8-16.

7 Verordnung der Finanzmarktaufsichtsbehörde (FMA) über die Informationspflichten für die Lebensversicherung (Lebensversicherung Informationspflichtenverordnung 2018 – LV-InfoV 2018), Austrian Federal Law Gazette II no. 247/2018; Verordnung der Finanzmarktaufsichtsbehörde (FMA) über die Informationspflichten für die Krankenversicherung nach Art der Lebensversicherung (Krankenversicherung Informationspflichtenverordnung – KV-InfoV), Austrian Federal Law Gazette II No. 374/2015.

8 Heiss/Lorenz in Fenyves/Schauer VersVG §§ 16-17 rec. 5.

9 OGH 27.02.2019, 7 Ob 242/185.

10 OGH 23.10.2019, 7 Ob 133/19p.

11 Grubmann, Versicherungsvertragsgesetz § 6, Rz 2 ff.

12 OGH 28.04.2003, 7 Ob 70/03z; RIS-Justiz RS0103965, RS0080168.

13 OGH 06.07.2004, 7 Ob 41/04m; OGH 23.01.2013, 7 Ob 201/12b; RIS-Justiz RS0080166.