The Insurance Disputes Law Review: Belgium
In Belgium, insurance and insurance law has become a hot topic in the media. Increasingly, policyholders are dissatisfied with the cost of premiums, refusals by insurers to provide coverage, claims settlements and alleged violations of legal obligations such as information requirements.
The legislature is continuously working on legal solutions and trying to adapt existing legislation to fit contemporary practices and complaints. For example, life insurers will have to respect certain deadlines in the future when paying out life capital, a tax reduction has been granted for legal expenses insurance, the notice periods for policyholders for the cancellation of an insurance contract can now be shortened, a right to be forgotten has been granted to policyholders when they have been cured of cancer for at least 10 years, and mandatory insurance for fire and water damage has been introduced for tenants and landlords. Moreover, the Insurance Distribution Directive (IDD) has been implemented into Belgian law. It is not only legislation that is evolving, but also case law. For example, the Supreme Court has interpreted the interruption of the limitation period for a direct action against the insurer, the applicability of the favourable limitation period of actions arising from an insurance contract, the duration of the coverage and gross fault. The Court of Appeal of Ghent interpreted the burden of proof in the event of intentional damage, and the Court of Appeal of Brussels interpreted the payment of costs in a liability insurance. Furthermore, the Belgian Constitutional Court has asked a preliminary question to the European Court of Justice regarding the insured's free choice of advisers in legal expenses insurance contracts, and on 14 May 2020 the European Court of Justice answered. The European Court of Justice also ruled on the interpretation of a choice of forum in an insurance contract regarding a large risk and whether this choice can be invoked against one of the insureds who did not agree with the choice.
In this chapter, I discuss in detail the legal framework of Belgian insurance disputes, interesting recent case law, international insurance disputes and emerging trends in insurance claims.
The legal framework
i Sources of insurance law and regulation
For Belgian law practitioners, the first point of reference regarding insurance law is the Act of 4 April 2014 concerning insurance (the Insurance Act), which contains, among others, provisions on the insurance contract, the obligations of the parties, limitation periods, insurance mediation and distribution, and supervision of insurance companies.
Apart from the rather long Insurance Act, Belgium has a number of relevant specific acts (e.g., for motor vehicle insurance, damage caused by terrorism, and the status and supervision of insurance companies) and countless royal decrees (e.g., for life insurance and fire insurance for simple risks).
Although the law changes constantly, the following key developments from the past 12 to 18 months (1 January 2019 to 30 June 2020) are worth mentioning.
First and foremost, the IDD has been implemented into Belgian law by five measures. Of these, the most noteworthy for this chapter are the Act of 6 December 2018 and the Royal Decree of 18 June 2019. Even though it intended to implement the IDD as literally as possible, Belgium did introduce certain differences. For example, the monetary limitation for the exemption for ancillary intermediaries from the strict requirements for distribution activities introduced by the IDD has been set at premiums of €200 per year. Furthermore, some provisions regarding insurance-based investment products are applicable to all insurance products. Some information requirements are not applicable to professional clients. Moreover, Belgian law still makes a distinction between brokers, agents and tied agents, and introduces some additional conditions for intermediaries. Finally, some provisions introduced by the Act of 6 December 2018 are not based on the IDD, such as those concerning data storage and liability for tied agents. The Royal Decree of 18 June 2019 concerns the registration of intermediaries, the number of persons responsible for distribution, professional liability insurance, the professional and organisational requirements for intermediaries, and the definition of a professional client.
Second, the Code of Conduct of 17 June 2019 for inducements for life and non-life insurance was approved by Royal Decree of 17 June 2019. This Code of Conduct was introduced after implementation of the IDD into Belgian law. In general, when providing inducements, two principles have to be taken into account: (1) principles regarding conflict of interests: the interests of the customer are central, the intermediary cannot be induced to sell a product instead of the product that best meets the customer's demands and needs; and (2) the principle of proportionality: inducements should be reasonable with regard to the services for which they are paid. Furthermore, the Code of Conduct contains specific rules for non-monetary inducements, meaning training seminars and events. Three non-exhaustive inducements are forbidden: (1) trips; (2) incentives for a limited amount of time per product or for a narrowly defined category of products when there is a relationship of investment advice between the intermediary and the customer; and (3) training seminars and events that do not meet the criteria of the Code of Conduct.
Third, the Act of 9 May 2019 concerning Mandatory Civil Professional Liability Insurance in the Construction Industry introduces mandatory insurance for architects, expert land surveyors, health and safety coordinators and other service providers in the construction sector. The coverage cannot be less than €1.5 million for damage resulting from bodily injuries, €500,000 for material and non-material damage and €10,000 for objects that were entrusted to the insured by the constructor.
Fourth, the Act of 2 May 2019 concerning Diverse Provisions regarding Economics adds new provisions to the Insurance Act regarding the pay-out period of life insurance contracts. In accordance with this Act, the insurer has to respect certain deadlines. For example, if it receives a request to pay out on a life insurance policy, the insurer has to state within two weeks which documents and information it requires. Any necessary additional documents or information must then be requested by the insurer within one month of receiving the original documents and information. After receiving all necessary documents and information, it has to pay out the life insurance within one month. There are, of course, exceptions, but these are too extensive to treat exhaustively in this chapter. If the insurer does not respect these deadlines, it has to pay interest, counted from the expiration of the deadline at issue, until the relevant requirement has been complied with. Furthermore, the documents and information requested by the insurer have to be reasonable and relevant for the payment of the life insurance. These provisions have taken effect on 22 May 2020.
Fifth, the Act of 22 April 2019 on Making Legal Expenses Insurance More Accessible introduces a tax reduction of 40 per cent for legal expenses insurance that complies with certain requirements. The coverage is limited for different kinds of disputes, namely €13,000 for civil disputes, €13,500 for criminal proceedings, €3,375 for divorces and €6,750 for construction and labour disputes. The Royal Decree of 28 June 2019 identifies the maximum amount of lawyers' fees that will be covered by these insurance contracts.
Sixth, the Act of 22 April 2019 amending the Act of 4 April 2014 concerning Insurance, to Adapt the Requirement regarding the Cancellation of Insurance Contracts to Better Protect Consumers amends Article 85 Section 1 of the Insurance Act. Normally, the parties to an insurance contract have to cancel the contract three months before the expiry date. If they do not, the contract is tacitly renewed for one year. By royal decree, for certain types of insurance contracts, the King can introduce shorter notice periods for policyholders when they do not want the insurance contract to be tacitly renewed. This royal decree has yet to be published.
Seventh, the Act of 4 April 2019 amending the Act of 4 April 2014 concerning Insurance Introducing a Right to Be Forgotten for Certain Types of Personal Insurance forbids an insurer assessing the current health of a potential policyholder to take into account cancer when the prospective client has been cured for 10 years. The insurer cannot exclude cancer, nor refuse to provide insurance nor charge an additional premium because of the previous illness. This Act has taken effect on 1 February 2020. The Royal Decree of 26 May 2019 defines certain types of cancer for which the 10-year period is shortened, as well as other chronic diseases to which this Act applies.
Last, it is worth mentioning that the Belgian legislator is rewriting the Civil Code. On 1 November 2020, new rules regarding evidence will enter into force. On 1 September 2021, new rules regarding property law will enter into force.
ii Insurable risk
In theory, almost every risk is insurable. However, a few exceptions exist.
First and foremost, fines and settlements in criminal matters are not insurable. Nevertheless, the person who is legally liable for the perpetrator can conclude an insurance contract covering such fines and settlements unless the insurance relates to road traffic or road transport.
Second, no insurer can be obliged to provide coverage for intentional damage. After all, when damage is induced intentionally, the parties to the insurance contract have not been confronted with any risk, which is one of the key components of insurance.
Third, some legal statutes or codes provide for general exclusions, such as Article 127 of the Insurance Act, which excludes harvest that has not been gathered, cattle living outside a building, soil, crops and forest plantations from natural disaster insurance coverage. However, the insurance contract can deviate from this provision.
Fourth, some insurers might refuse to insure a certain risk because, following a cost–benefit analysis, it proves to be too costly or too risky for the insurer. For example, a health insurer for pets always refuses to cover hereditary diseases. Generally, no insurer covers damage caused by war or similar circumstances. The same applies to the life insurer who, in principle, does not cover suicide or death immediately and directly caused by a crime intentionally committed by the insured as perpetrator or co-perpetrator, if the consequences were foreseeable.
Another distinction can be made between compulsory insurance and non-compulsory insurance. Belgium has introduced compulsory insurance for no fewer than 33 categories of risks. These categories are:
- occupational accidents;
- architects, expert land surveyors, health and safety coordinators, contractors and other service providers in the construction sector in real estate;
- tenants and landlords (fire and water insurance);
- payment institutions and collective investment undertakings;
- accounting and tax professions, insolvency practitioners and temporary administrators;
- audit agency;
- service providers;
- real estate;
- fairground activities;
- nuclear installations;
- surveyor experts;
- local public institutions;
- education, training and childminders;
- public procurement;
- publicly accessible institutions;
- care homes;
- social developments;
- mine waste;
- trustees of real estate;
- volunteers; and
- health insurance.
iii Fora and dispute resolution mechanisms
Insurance disputes are dealt with at various levels. Frequently, the general conditions of the insurance company advise the policyholder to file a complaint with the internal ombudsman service. If this step is unsuccessful, the policyholder often contacts the Insurance Ombudsman, established by the Federal Public Service Economy. The Insurance Ombudsman tries to settle the dispute and to obtain a favourable solution for every party.
Increasingly, parties try to resolve their disputes amicably, not only through the Insurance Ombudsman, but also through binding third-party decisions and mediation.
A policyholder or the insurance company can also subpoena the other party before regular courts. Which court depends on the amount of the claim, the nature of the claim and the capacity of the parties. If the amount of the claim does not exceed €5,000, the claim can be brought before a justice of the peace.
Generally, claims have to be brought before courts that hold special or exclusive competence. For example, claims for damages resulting from a traffic accident have to be brought before a police court, unless the dispute has a purely civil nature. The labour courts are competent for occupational accidents and group insurance (supplementary pensions). If an insurer files a subrogation claim against a tenant, the claim has to be brought before a justice of the peace. In most cases, however, the parties refer insurance disputes to the court of first instance.
If the parties are both enterprises or if the defendant is an enterprise, the claim has to be brought before a commercial court.
The Belgian legislature is not very fond of arbitration in the insurance sector. According to Article 90 Section 1 of the Insurance Act, insurance contracts cannot include an arbitration clause. However, the Royal Decree of 24 December 1992 makes an exception for certain types of insurance.
i Limitation period
Direct action against insurer: interruption of limitation period
In Belgium, the injured party can file a claim against the liability insurer of the liable party directly, in what is called the injured party's 'own right'.
There are specific limitation periods for the direct action against the insurer of the liable party. According to Article 88(2) of the Insurance Act, the claim resulting from the injured party's own right against the insurer is time-barred by five years, counting from the damage-causing event or, in the case of a crime, from the day the crime was committed. However, if the injured party proves that he or she has only learned of his or her right against the insurer at a later date, the limitation period will only start from that time, but it will in any case expire after 10 years from the damage-causing event or from the day the crime was committed. This means that the limitation period does not start until the moment that the injured party knows who the insurer of the liable party is.
In accordance with Article 89(5) Insurance Act, the limitation period of the direct claim of the injured party against the liability insurer is interrupted as soon as the insurer becomes aware of the will of the injured party to receive compensation for the damage suffered. A new limitation period starts after the insurer has informed the injured party in writing that it decided to pay or decline compensation.
The facts that led to the judgment of the Supreme Court of 25 November 2019 were as follows. In 1988, the injured party was involved in a roller skate accident for which she was treated and operated on by a doctor who allegedly performed a useless operation resulting in irreversible damage. It was not until 2000 that the injured party became aware of the alleged professional mistake. In 2001, the injured party subpoenaed the doctor. That doctor informed his liability insurer of this subpoena by fax. The liability insurer refused coverage. Therefore, the injured party subpoenaed the liability insurer to intervene in the procedure in 2006.
The insurer argued that the direct claim of the injured party was time-barred, but the injured party invoked the interruption of the limitation period in accordance with Article 89(5) Insurance Act. According to the insurer, an interruption of the limitation period is only possible if the insurer becomes aware of the will of the injured party to receive compensation from the insurer. Since the injured party only subpoenaed the doctor, the insurer argued that the limitation period was not interrupted and the direct claim was time-barred.
After the court of first instance and the court of appeal both rejected this argumentation and obliged the insurer to pay compensation, the insurer filed an appeal before the Supreme Court. The Supreme Court rejected its argumentation as well and stated that it is not required that the insurer becomes aware of the will of the injured party to receive compensation from the insurer in order for the limitation period to be interrupted.
Therefore, if the insurer receives the subpoena from its insured, the limitation period of the direct claim of the injured party against the insurer is interrupted. The interruption ends when the insurer informs the injured party in writing of its decision to pay or refuse compensation.
This case law is in line with previous case law regarding the interruption of the limitation period. The Supreme Court and lower courts often interpret this provision very broadly.
Applicability of limitation period
In insurance law, specific limitation periods apply. The limitation period for any legal action arising from an insurance contract is three years. Since this limitation period is considerably shorter than the ordinary limitation period for contracts (10 years for a personal action and 30 years for an actio in rem), the discussion often arises what can be considered as an 'action arising from an insurance contract'. For example, when an insurer demands restitution from the insured of compensation it mistakenly paid, this does not fall within the scope of Article 88(1) Insurance Act.
The claimants demanded compensation for damage resulting from significant losses of the underlying assets of a life insurance. They argued that the insurer had breached the insurance contract regarding these underlying assets during the conclusion and execution of the insurance contract.
The Court of Appeal ruled on 4 October 2018 that the limitation period of three years applies because the contractual action was undoubtedly based upon the life insurance contract. The Supreme Court agreed: the legal action arises from an insurance contract when it relates to the existence of the contract and the obligations arising from it, both for contractors and towards third parties, regardless of the legal basis on which the action is based.
ii Duration of the coverage
In liability insurance, the insurer has to provide coverage for damage occurring within the duration of the insurance contract and claims filed after the end of the insurance contract, also known as the loss occurrence system. However, for some insurance contracts the parties can agree that the insurance cover only applies to claims that are filed in writing against the insured or the insurer within the duration of the contract for damage occurring within the same duration (claims made system). In that case, the insurer also has to cover the claims, filed in writing within 36 months of the end of the contract, concerning: (1) damage that occurred within the duration of the contract if at the end of the contract the risk is not covered by another insurer; and (2) acts or facts that give rise to damage and that occurred within the duration of the contract and are notified to the insurer.
If the contract does not provide for a claims made system, the loss occurrence system applies. The Supreme Court had to interpret Article 142(1) Insurance Act on 25 February 2020. The criminal court had convicted a doctor because he unintentionally caused the death of a patient on 5 February 2013 due to a lack of caution or precaution.
Nineteen persons requested compensation for the death following the conviction of the criminal court. The Court of Appeal ruled that the liability insurer of the doctor had to pay compensation. The insurer filed an appeal before the Supreme Court because the duration of the coverage ended on 31 December 2010. Since the victim died in 2013, the insurer argued that it did not have to provide coverage. The court of appeal had ruled that the insurer had to pay compensation because the victim was able to establish a link between the medical complaints and the mistakes of the doctor between mid-2009 and 26 August 2010. Therefore, according to the Court of Appeal, the damage arose between mid-2009 and 26 August 2010, within the duration of the insurance contract.
The Supreme Court ruled in favour of the insurer: when the insured causes the death of the victim as a result of his fault, the damage of the successors and the persons who suffer damage because of the death arises on the moment of the death. The insurer has to pay out if the death occurs within the duration of the insurance contract.
iii Intentional damage: burden of proof
An insurer cannot be forced to provide coverage to a person who intentionally causes damage. If an insurer wants to invoke this provision, he has to prove that the person demanding cover has intentionally caused the damage.
The facts leading to the judgment of the Court of Appeal of Ghent on 3 October 2019 were as follows. A motorhome was burnt down, after which the owner submitted a claim to the fire insurer. A discussion arose on whether or not the fire was intentionally caused and if so, by whom. An expert determined that the fire was in fact intentionally caused, but it was not clear whether the insured was the culprit or not. The insurer refused coverage and argued that no one else could have caused the fire.
The Court of Appeal of Ghent ruled that the insurer not only has to prove that the damage was caused intentionally but also that this was done by the insured. The insurer could not prove this, and there were several indications that the fire might well have been caused by someone else. Furthermore, the insured did not seem to have any motive to burn down her motorhome. Therefore, the insurer had to pay out.
iv Liability insurance: payment of costs
The liability insurer not only has to pay the principle sum amounting to the cover, but also the interest, the costs of civil actions and the fees and costs of lawyers and experts, even above the cover limits. The cover for the costs of civil actions and the fees and costs of lawyers and experts only have to be paid by the insurer insofar as those costs are incurred by him or with his consent or, in the event of a conflict of interest not due to the insured, insofar these costs have not been made unreasonably.
According to the Brussels Court of Appeal, this provision only applies to costs of the procedure between the injured party and the insured/insurer. It does not apply to a procedure between the insured and the insurer. Therefore, these costs have to be paid by the insured himself or herself.
The international arena
i Preliminary question regarding free choice of lawyer in legal expenses insurance
For matters concerning international and European areas, Belgium and other Member States of the European Union often look to the European Court of Justice for guidance. For example, the Belgian Constitutional Court has asked a preliminary question to the European Court of Justice regarding free choice in respect of advisers in legal expenses insurance contracts.
The Act of 9 April 2017 amended Article 156(1) of the Insurance Act regarding the free choice of advisers in legal expenses insurance contracts. Every legal expenses insurance contract has to state that the insured has a free choice of lawyer or any other person who is qualified to defend, represent or promote the insured's interests when judicial, administrative or arbitration proceedings have to be initiated. Moreover, the insured can freely choose any person who has the required qualifications and is appointed to do so in the event of arbitration, mediation or any other acknowledged extrajudicial form of dispute resolution. The amendment to Article 156(1) of the Insurance Act now extends that free choice of advisers to alternative forms of dispute resolution such as mediation.
This Act makes a distinction between, on the one hand, a free choice of lawyer in the event of a judicial, administrative or arbitration procedure and, on the other hand, a free choice of the person who leads the arbitration, mediation or other extrajudicial dispute resolution procedure. For example, in the case of mediation, the insured does not have a free choice of lawyer, but does have a free choice of mediator. According to the legislature, the reason for introducing this distinction was that the presence of a lawyer is not beneficial for mediation and the agreement reached through mediation is not necessarily based on legal reasoning.
The Belgian Bars asked the Constitutional Court to annul this Act. According to them, this Act introduced an unconstitutional difference between, on the one hand, the insured who wants to introduce an arbitration procedure and, on the other hand, the insured who wants to solve a dispute through mediation.
In Belgium, there is a distinction between extrajudicial mediation and judicial mediation. An extrajudicial mediation can be initiated by the parties before, during or after judicial proceedings. The agreement reached by the mediator and the parties can be accredited by a judge if the mediator is acknowledged. A judicial mediation occurs when the judge ruling on a dispute orders mediation at the parties' request, or if the judge proposes mediation and the parties agree to this. The dispute remains pending and the judge can take other measures. The agreement reached by the parties through judicial mediation can be accredited by that judge. If no agreement is reached, the judicial proceedings continue. The difference between these two types of mediation and arbitration is that arbitration leads to a decision made by arbitrators.
According to the Constitutional Court, arbitration and mediation are comparable situations, meaning that no discrimination between the two may arise. The Court refers to case law of the European Court of Justice to rule that the free choice of a lawyer cannot be restricted. However, European law does not extend this right to extrajudicial proceedings. Therefore, the Constitutional Court decided to ask the following preliminary question to the European Court of Justice: 'Should the term “proceedings” in Article 201(1)(a) of Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance be interpreted as including extrajudicial and judicial mediation proceedings, as provided for in Articles 1723/1 to 1737 of the Belgian Gerechtelijk Wetboek (Judicial Code)?'
The Court of Justice ruled on 14 May 2020 that 'proceedings' include judicial and extrajudicial mediation proceedings in which a court is involved or is capable of being involved, whether when those proceedings are initiated or after they are concluded. The term 'proceedings' cannot be limited, either solely to non-administrative proceedings conducted before a court in the strict sense, or by drawing a distinction between the preparatory stage and the decision-making stage of proceedings. The effect of the agreement reached by the parties, whether in judicial or extrajudicial mediation, is to bind the competent court that approves it and, after having become enforceable, the agreement has the same effect as a judgment. In the context of proceedings that are capable of determining definitively the legal position of the insured party, without him or her having any real opportunity to alter that position by means of legal proceedings, the insured party needs legal protection and, in view of the effects of the agreement resulting from the mediation being approved, the interests of the insured party who uses mediation will be better protected if he or she can rely on the right to a free choice of representative laid down in Article 201 of Directive 2009/138, in the same way as an insured party who turns to the courts directly may so rely.
Following this judgment (C-667/18), the Belgian Constitutional Court now has to decide whether the law of 9 April 2017 has to be annulled.
i Preliminary question: choice of forum
Regarding insurance contracts, Regulation 1215/2012 protects the weaker party by rules of jurisdiction more favourable to his or her interests than the general rules. For that reason, the policyholder, insured or beneficiary can for example subpoena an insurer before the courts of the place where they are domiciled. However, a choice of forum is still possible under strict conditions (Articles 15–16), for example, when the choice of forum relates to a contract of insurance covering a large risk.
The company Grifs offers security services and is domiciled in Lithuania. Grifs is owned by company Grifs AG SIA, domiciled in Latvia. Grifs AG SIA and insurer Balta, also domiciled in Latvia, concluded a liability insurance contract, which covers the legal liability of Grifs as well. Grifs is, therefore, an insured, and Grifs AG SIA the policyholder. The general conditions of the insurance contract contain a choice of forum in favour of the courts of Latvia. When a client of Grifs receives compensation for a gross negligence of Grifs resulting in a theft of jewels and cash, Grifs sues Balta before a court of Lithuania in order to receive insurance cover. During this procedure, the discussion arises whether the courts of Lithuania have jurisdiction taking into account the choice of forum in favour of the courts of Latvia in the insurance contract.
The European Court of Justice receives the following preliminary question: 'Is a choice of forum in an insurance contract between a policyholder and an insurer that covers large risks applicable to the insured who is not an insurance professional, did not accept the choice of forum and is domiciled in another member state than the policyholder and insurer?'
The Court of Justice ruled that in principle, the possibility to deviate from the general rules of jurisdiction in an insurance contract covering large risks only applies in the relation between the parties to the contract and that it cannot be extended to an insured third party. However, the special jurisdiction rules protecting the weaker party cannot be extended to those who do not need protection. Protection is not needed in the relation between professionals in the insurance sector, none of whom can be assumed to be in a weaker position than the others.
In this case, Grifs was not a professional in the insurance sector, did not accept the choice of forum and was not domiciled in the same member state as the policyholder and insurer. Therefore, the choice of forum could not be invoked against Grifs.
Following this judgment, it is not only important to assess whether the insurance contract with choice of forum covers one of the risks referred to in Article 16 Regulation 1215/2012 (such as a large risk) but also whether one of the parties can be considered to be the weaker party.
Trends and outlook
i Busiest areas of claims
It is very difficult to assess the busiest areas of insurance claims in Belgium. Belgium does not have an overview of all claims that were referred to the different courts. However, one can investigate all insurance disputes of the highest courts of Belgium, since their judgments are always published. Here it becomes apparent that most disputes involve mandatory liability insurance for motor vehicles. This is very understandable since every person who owns or drives a motor vehicle is obliged to take out liability insurance.
The same conclusion can be made for all complaints filed with the Insurance Ombudsman. In 2019, 1,171 complaints involved motor vehicle insurance, 1,033 fire insurance, 1,001 life insurance, 995 health insurance and 601 legal expenses insurance. The remaining complaints were about various insurance contracts (transport, credit and complaints not clearly defined (649)), other civil liability insurance (265), annulation (316), all-risks insurance, such as for mobile phones (307), assistance insurance (219), occupational accidents (102) and individual accidents (56). Compared to complaints in 2018, there has been a clear increase in complaints about all-risks insurance, especially regarding insurance for mobile phones. The main problem with insurance for mobile phones lies in the cancellation of the contract: the customer often has to go a long way before he or she can contact the insurer, and claims are often handled abroad, resulting in long waiting periods.
Most of the complaints are about a lack of communication, a lack of a reaction to questions and long waiting periods for the handling of an insurance policy. The Ombudsman also noticed that the increased use of digital tools in the sector can cause consumer confusion. This is evident both when concluding a contract, in the daily claims handling and in the communication and accessibility of the insurer in general. When concluding a contract, the insurer or intermediary often asks digitally whether the insurance product meets the customer's demands and needs. The Ombudsman raised the question whether the analysis of the demands and needs of the customer in the procedure took place and advised the use of questionnaires. The online filing of claims makes it easier to open a file but the further claim handling does not necessary give customers the feeling that their claims are being properly followed up. The customer does not enter into a dialogue and does not feel that he is really being helped.
Some complex concepts and various situations require clearer and more humane communication than a website, a FAQ or a chat box can provide. The accessibility of the insurer remains essential for the consumer. From the questions to intervene received by the Ombudsman in 2019, it appears that this accessibility has not improved with the introduction of digital tools. After all, the lack of response and follow-up and long handling periods continue to give rise to complaints on a regular basis. Despite the growth of digital technology, the insurance world needs a human framework.
ii Areas that are likely to evolve and become more important in the future
First, new or changed legislation always results in new disputes and case law. Two noteworthy examples are the General Data Protection Regulation (GDPR) and the IDD.
Furthermore, courts are often confronted with claims concerning life insurance policies without a guaranteed return (known as Branch 23 policies). In the years before the global financial crisis, these insurance policies were promoted by and concluded with the help of insurance intermediaries who were, at the time, not extensively regulated. The clients for these policies are now starting proceedings because rather recently it became clear that all the money invested in these policies is now lost. The clients often claim in these proceedings that the insurance intermediaries or the insurer withheld information, and had the clients received that information they would have invested in another product.
Obviously, the European and Belgian legislatures have now started to regulate the distribution activities of insurance companies and intermediaries, and clients are increasingly aware of the behaviour that the insurance companies and intermediaries have to adopt.
One of the most recent pieces of European legislation is the IDD. This instrument is not only relevant for compliance officers, but also for clients, who can now expect certain behaviour on the part of their contracting parties.
In the context of evolving areas, a general awareness of global problems, such as climate change, can result in new insurance policies. Currently, the insurance sector is reluctant to provide coverage for weather disasters because of high costs and risks; for example, in the agricultural sector, the renewable energy sector, the transport sector or the tourism sector. However, these kinds of insurance policies are becoming more essential than ever. Reliance on the Belgian Agricultural Disaster Fund might not be sufficient. Therefore, the Belgian government has promoted insurance for weather disasters since the autumn of 2017 and together with several agricultural organisations continues to negotiate in favour of affordable premiums. For example, the Decree of 5 April 2019 of the Flemish Region further simplifies administrative procedures, updates the reimbursement process and introduces an aid scheme for farmers who have concluded a comprehensive weather insurance contract.
In addition, technological and scientific progress sparks new insurance policies. As mentioned above, the first cyber insurance policy was concluded in 2010. Vanbreda Risk & Benefits, a Belgian independent insurance broker and risk consultant, predicts that drone insurance will become common in 2020 and that the first insurance policy for robotics and automated guided vehicles will appear in 2030.
Furthermore, the covid-19 pandemic leads to an increase of exclusions in life and non-life insurance contracts that did not already contain a general exclusion for pandemics, as well as an increase in claims. Some discussions might arise regarding the question whether an insurance policy covers pandemics, such as business interruption policies. The covid-19 pandemic might cause financial problems for the whole economy, resulting in many claims in trade credit insurances, covering businesses against debts that cannot be paid by their customers or suppliers. This might eventually lead to an increased premium or financial difficulties for the whole economy, or both. The insurance sector has taken measures to combat the economic consequences of covid-19, for example for fire insurance, outstanding-balance life insurance and group insurance of employers whose employees are temporarily unemployed.
Insurance law is an ongoing process of trial and error and a constant interaction between the legislature, the judiciary and the executive. When new legislation is published, case law will evolve. When case law evolves, legislation has to be changed. When certain insurance problems receive media attention, both case law and legislation are to an extent forced into taking a certain direction. Therefore, it is fairly possible that new topics will arise in the future and we, as law practitioners, look forward to any evolution of insurance law.