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Consequences for not Disclosing the Right to Cancel a Life Insurance Contract

Consequences for not Disclosing the Right to Cancel a Life Insurance Contract

Czech Republic
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In December 2019, the Court of Justice of the European Union ruled on the interpretation of the Solvency II Directive regarding the right to cancel a life insurance contract and the duty of the insurer to inform customers of the right.

The decision states that if an insurance company doesn't inform its client about their right to cancel a contract or the provided information is severely deficient (the severity would be decided by the court in the case of a dispute), the period to exercise the right to cancel the insurance contract does not run at all - this applies even if the policyholder had learned of the right to cancel from another source, i.e. on TV or the internet. The policyholder would then be entitled to cancel the insurance contract without any time limitation, even if the contract has already been terminated and settled (the client's surrender had already been paid), unless the governing law of the contract provides otherwise.

(The Judgment of the CJEU in cases C-355/18 to C-357/18 and C-479/18 dated 19 December 2019)

By Michaela Smotkova, Senior Associate, and Martin Vanek, Paralegal, JSK

Czech Republic Knowledge Partner

JŠK, advokátní kancelář, s.r.o. (JŠK) is a medium-sized law firm based in Prague providing a comprehensive range of commercial legal advisory services in the Czech Republic. Our team consists of almost 30 lawyers, five of whom are partners with many years of experience from leading international law firms. We advise local and international clients from banking, insurance and various industry sectors, boast a respected projects practice, and work for the public sector at the federal and municipal level.

Ever since it was founded in 2004, JŠK has striven for the epitome of professionalism, expertise and ethical integrity. We continuously seek to surpass what large global law firms can offer and to give our clients a personal approach. All mandates are equally important to us regardless of size as we guide clients through both complex and seemingly routine matters.

Our clients turn to us for advice when implementing their business plans across all areas of commercial law. We are proud members of PONTES: the CEE lawyers, a unique network of law firms through which we provide services not only in the Czech Republic but also in Austria, Bulgaria, Hungary, Poland, Romania and Slovakia.

Firm's website: http://www.jsk.cz

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