KMU-Magazin No. 11/12, November/December 2021 On the partial revision of the Insurance Contracts Act
The revised Insurance Contracts Act (ICA) will come into force on 1 January 2022. The provisions of the law affect private insurance such as liability, vehicle, life and supplementary medical insurance. This article provides an overview of the most important provisions of the partial revision.
At its meeting on 11 November 2020, the Federal Council decided to bring the revised Insurance Contracts Act (ICA) into force on 1 January 2022. Although many people in Switzerland regularly take out private insurance in addition to their social insurance, the majority have only a superficial knowledge of the rights and obligations contained in the ICA.
The coming entry into force of the partial revision is therefore a good opportunity to take a closer look at individual provisions of the law.
Scope and main features of the revision
The Insurance Contracts Act (ICA) regulates the insurance relationship between customers and insurance companies. However, the law does not apply to social insurances such as the Federal Law on Old Age and Survivors' Insurance (AHVG) or the Federal Law on Health Insurance (compulsory health care insurance; KVG). Rather, the applicability of ICA is limited to private insurance such as liability insurance, vehicle insurance, life insurance, etc.
The aim of the ICA revision is to strengthen the rights of insured persons and to adapt the Insurance Act to the digital age.
Right of withdrawal of the insured person
In the future, the insured person may cancel a concluded insurance contract within a cooling-off period of 14 days (Art. 2a f. nVVG). Before the contract is concluded, the insurance company must inform the insured person of this right and of the form and deadline for the right of cancellation.
The insured person must revoke the contract in writing or in another form that allows proof by text. This means that the cancellation can also be made by e-mail. However, the period of 14 days must be observed. It is calculated in accordance with the Swiss Code of Obligations (OR) and begins as soon as the insured person has applied for or accepted the contract. The first day of the period is the day following the application or acceptance. The period is is complied with if the insured person notifies the insurance undertaking directly of his cancellation on the last day of the period or delivers his notice of cancellation to the post office.
Example: If the contract offer is accepted on Wednesday, 5 January 2022, the deadline begins on Thursday, 6 January 2022 (first day of the deadline). After the expiry of 14 days, the period ends, i.e., on Wednesday, 19 January 2022 (last day of the period). If the last day of the period falls on a Sunday, the last day of the period shall be the next following working day.
Additional information obligations of insurance undertakings
The existing information obligations of insurance undertakings, which the undertakings must fulfil before concluding the contract, will be extended or supplemented with the forthcoming revision. The information obligations are governed by Art. 3 VVG.
In the future, the insurance company must also provide information as to whether the insurance is a sum or a non-life insurance. In the case of sum insurance, the insurance company is obliged to pay exactly the agreed benefit in the event of an insured event - for example CHF 100,000 in the event of disability - whereas in the case of indemnity insurance, "only" the loss incurred is covered.
In addition, there are information obligations in connection with the aforementioned right of withdrawal and any deadline for submitting the notice of claim.
Termination of the contractual relationship (notices of termination)
Insured persons may now terminate their contractual relationship in any form that allows proof by text (Art. 35a para. 1 nVVG). Specifically, notice of termination may now be given in particular by e-mail. This also means that the notice of termination no longer has to be signed by the insured person in person.
As far as the period of notice is concerned, the ICA provides for an ordinary right of termination by the insured person for contracts with a term of more than three years (Art. 35a nVVG). Life insurance policies are excluded from this right. The termination may be effected at the end of the third year or at the end of any subsequent year, subject to a notice period of three months. It is important to note in this context that this regulation also applies to contracts concluded before 1 January 2022.
Furthermore, with regard to the termination of the insurance contract, the ICA now stipulates that only the insured person is entitled to terminate the contract ordinarily and on the basis of the insured person's receipt of benefits (right of termination in the event of a claim) in the case of supplementary insurance to compulsory healthcare insurance (Art. 35a para. 4 ICL). Consequently, health insurers may not terminate the contract of the supplementary insurance for the insured, neither ordinarily nor on the basis of a claim for benefits. An exception to this rule exists in the case of collective daily benefits insurance.
Finally, the insured person is granted the right to terminate the most recently concluded contract within four weeks of discovery of multiple insurance (Art. 46b nVVG). Multiple insurance exists if the same interest is insured against the same risk and for the same period of time with more than one insurance company, so that the sum insured together exceeds the insured value.
Direct right of claim in liability insurance
The injured third party has a direct right of claim against the insurance company pursuant to Art. 60 nVVG. If a third party suffers a loss due to the conduct of the insured, the third party may assert its claims directly against the liability insurance of the injuring party, even though there is no contractual relationship between the third party and the insurance company.
The insurance company's right of recourse against third parties
Article 72 of the ICA, which is still in force today, stipulates that the insured's claim for compensation against third parties arising from a tortious act is transferred to the insurance company (so-called subrogation). In other words, the insurance company has the right to claim from a third party the loss which the company has compensated its insured on the basis of the contract, provided that the loss results from a tortious act.
For a long time, it was unclear whether this provision only applied to tortious acts within the meaning of Art. 41 CO or whether it also meant breaches of contract (Art. 97 CO) and other causal liabilities. With the new creation of Art. 95c nVVG this discussion becomes obsolete. The right of recourse of the insurance company is no longer limited to tortious acts. Pursuant to Art. 95c nVVG, the insurance company shall be subrogated to the rights of the insured person to the extent and at the time of its payment for the similar items of loss covered by it. The insurer may then seek recourse against the third party who caused the damage, provided that the relevant conditions are met. The insurer's right of recourse is excluded if the damage was negligently caused by a person closely related to the insured. For example, if the persons live in a domestic community, are in an employment relationship with each other or the persons are authorized to use the insured property. This is intended to prevent existing relationships from being burdened by the insurance recourse.
The new Insurance Contracts Act provides for a number of innovations which improves the position of insured persons and simplifies contact and communication between the insurance company and its clients.
However, the insurance business often remains a red rag for the layman. The General Conditions of Insurance (GCI) of the insurer alone, which are sometimes formulated in a language that is unfamiliar to laypersons and can also be rather long, will probably be studied carefully by very few insured persons at the beginning of the contractual relationship. The information requirements set out in Art. 3 of the Insurance Contracts Act are unlikely to change this situation in practice.
In the case of specific insurance law questions, it is therefore preferable to contact an independent body that can guarantee comprehensive advice.
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