Transparency in Insurance Contract Law

This Volume of the AIDA Europe Research Series on Insurance Law and Regulation is dedicated to transparency as the guiding principle of modern insurance law (contract law, insurance mediation law and supervisory law). It consists of chapters on transparency from a range of civil and common law jurisdictions, along with overview chapters. Each chapter reviews the transparency principles applicable in the jurisdiction covered by it. The authors are leaders in their respective fields. Virtually all jurisdictions recognize a duty on the assured to make a fair presentation of the risk when submitting a proposal for cover to the insurers, although there is little consensus on the scope of that duty. Disputed matters as to the duty include: whether it is satisfied by honest answers to express questions or whether there is a spontaneous duty of disclosure; whether facts relating to the assured's character, as opposed to the nature of the risk itself, are to be presented to the insurers; the role of brokers in the placement process; and the remedy for breach of duty. Transparency is, however, a much wider concept. Potential policyholders are in principle entitled to be made aware of the key terms of coverage and to be warned of hidden traps (such as conditions precedent, average clauses and excess provisions), but there is a range of different approaches. Some jurisdictions have adopted a "soft law" approach, using codes of practice for pre-contract disclosure; since 2018 the EU has introduced minimum standards for marketing and selling policies; Australia has a detailed regime demanding the provision of Key Fact Sheets; yet other jurisdictions rest upon the rather nebulous duty of utmost good faith. The outcome is that unclear or disguised restrictions may not be enforceable. Leaving aside placement, transparency is also demanded after the policy has incepted. The assured is required to be transparent in the claims process. There is less consistency in national laws as to the operation of transparency by insurers in handling claims.