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September 16, 2024

Amendments to the Insurance Law: new rules on faster response and payment times for insurers

On 1 October 2024, new legal rules will take effect requiring insurers to respond to and pay out on claims more quickly. The purpose of these changes is to give insured parties better protection and speed up the handling of claims. In this article, we discuss the key changes and what they mean for both insurers and insured.

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The need for transparent and rapid follow-up

Currently, insurers in some insurance sectors such as third-party motor vehicle and fire are subject to specific turnaround times for handling claims. Other insurance sectors lack such rules, though, and this often means long waiting times.

New legislation

In order to optimise the functioning of insurance and set some limits, a number of changes are being made to the Insurance Law. The new rules, which will take effect on 1 October 2024, introduce a general legal framework for all insurance sectors, setting clear deadlines by which insurers must respond and pay out. The law is intended to ensure optimal claims settlement without unnecessary delays.

Three deadline and penalty systems

The applicable deadline depends on the type of insurance:

  1. Liability insurance: inspired by the existing rules for motor vehicle liability insurance, strict deadlines and penalties are being introduced.
  2. Property insurance: the rules that currently apply to fire insurance are being extended to other types of property insurance.
  3. Other insurance: a general system is being introduced for insurance sectors such as accident and health insurance.

To enforce the application of the new rules, financial penalties will be imposed if certain response deadlines are not met:

  • The insurer must provide a reasoned response to any insurance claim within three months. The penalty for failing to meet this deadline is a fixed compensation payment of 300 euros to the insured party.
  • After the three months have passed and on condition that the insurer has been reminded by registered letter and failed to respond within 11 days, compensation must be paid of 300 euros per day of delay from the sending of the reminder. The 11-day period will start from the third working day after the sending of the reminder and end as soon as the beneficiary has received the reasoned response.

These amounts will be automatically index-adjusted on 1 January.

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