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