Question ID: 1346
Regulation Reference: (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)
Article: 2, 18
Status: Final
Date of submission: 03 Sep 2018
Question
In Romania, the Civil Code (CC) defines and regulates insurance contract. CC provides an article which give the right to insurers to cancel unilateral the contracts (without any reason) as long as they give a notice period of 20 days.
"CC - CHAPTER XVI - Insurance contract
Unilateral termination of the contract
Article 2.209. - The termination of the insurance contract by one of the parties may be performed only with a 20 days prior notice, from the date of receiving the notification by the other party."
This article refers to both life and non-life insurance contracts.
"DA Article 18 - Boundary of an insurance or reinsurance contract 3.Obligations which relate to insurance or reinsurance cover provided by the undertaking after any of the following dates do not belong to the contract, unless the undertaking can compel the policyholder to pay the premium for those obligations:
(a) the future date where the insurance or reinsurance undertaking has a unilateral right to terminate the contract;
(b) the future date where the insurance or reinsurance undertaking has a unilateral right to reject premiums payable under the contract;
(c) the future date where the insurance or reinsurance undertaking has a unilateral right to amend the premiums or the benefits payable under the contract in such a way that the premiums fully reflect the risks.
..."
Considering the above definition of the contract boundaries from DA, can it be assumed that contract boundaries is 20 days?
EIOPA answer
Where the insurance undertaking has the unilateral right to terminate the contract at any time provided that a notice period of 20 days is respected, the contract boundary would exclude all insurance obligations which relate to insurance cover provided after 20 days plus the time it takes to notify the policyholder. According to Guideline 2 of EIOPA's Guidelines on contract boundaries an undertaking's termination right should be considered as unilateral when neither the policyholder nor any third party can restrict the exercise of that right.
EIOPA is not in a position to provide any opinion on the interpretation of national laws, including Article 2209 of the Romanian Civil Code in this regard.