Do the Principles of European Insurance Contract Law Go Too Far in Protecting the Policyholder?

Author:Olavi-Jüri Luik
Position:Magister iuris. Attorney-at-law, Lextal Law Firm

1. Introduction - 2. Pre-insurance-contract legal relationships - 2.1. The pre-contractual information duty of the policyholder - 2.2. The policyholder’s pre-contractual duty to warn - 3. Contractual legal relationships in insurance - 3.1. The period of insurance - 3.2. Withdrawal from an insurance contract after conclusion of the contract - 3.3. Payment of the insurance premium - 3.4. Transfer... (see full summary)

Olavi-Jüri Luik
Magister iuris
Attorney-at-law, Lextal Law Firm
Do the Principles of European
Insurance Contract Law Go
Too Far in Protecting the
1. Introduction
One of the purposes of the European Union (hereinafter referred to as the EU) is a functioning uniform
internal market. However, a common market is largely based on contract law. The EU contains 27 different
contract laws, making cross-border activity complicated and expensive. The European Commission is about
to develop the Common Frame of Reference (hereinafter referred to as the CFR) for European contract
law, one part of which is to cover insurance contracts (in the Principles of European Insurance Contract
Law*1—hereinafter referred to as the PEICL*2). The 1.7.2010 Green Paper from the European Commission
on policy options for progress toward a European contract law for consumers and businesses*3 was pre-
sented for public discussion with the aim of consultation concerning the possibilities for further develop-
ing the eld of European contract law. In its Green Paper, the European Commission in essence proposes
seven approaches for improving the coherence of European contract law, including an optional European
Contract Law (i.e., the ‘28th regime’*4 or the ‘second regime’), which would be an optional instrument for
consumers and undertakings to apply in their contractual relationships.*5 This optional right would be an
1 Principles of European Insurance Contract Law: Project Group ‘Restatement of European Insurance Contract Law’, Com-
mon Frame of Reference. Chapter III, Section IX1. Insurance Contract. Available at
Insurance-Contract-17122007-FINAL.pdf (1.3.2011).
2 The general part (I part) and the non-life insurance part (II part) of the PEICL were rst published and presented to the
European Commission in December 2007, the III and the IV part are not complete yet, but will include life insurance and
civil liability insurance (Project Group ‘Restatement of European Insurance Contract Law’. Available at http://www.restate- (1.3.2011).
3 European Commission, COM(2010)348 nal. Available at
et,en&lng2=bg,cs,da,de,el,en,es,et, ,fr,hu,it,lt,lv,mt,nl,pl,pt,ro,sk,sl,sv,&val=518792:cs&page=1&hwords=Euroopa+lepingu
%C3%B5iguse+loomise+v%C3%B5imalused+tarbijate+ja+ettev%C3%B5tjate+jaoks%7E (1.3.2011).
4 ‘Internal’ Contract Law of the 27 Member States vs. the 28th regime, that is, a 2nd regime for all Member States. The European
optional procedure will become a part of the national law of the Member States similarly to other sources of the European
law. The 2nd regime would give the parties an opportunity to choose between two regimes of national contract law, one of
which is being enforced by the legislator of the Member State and another by the European legislator. This is an alternative
to traditional approximation of legislations.
5 Also see the opinion of the European Economic and Social Committee on ‘28th regime—an alternative allowing less lawmak-
ing at Community level’ (own-initiative opinion). – OJ C 21, 21.1.2011, p. 26.

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