Changes in the law affecting existing insurance policies (from 2022)

The Insurance Policies Act regulates the relationship between insurance companies and their customers and, along with the Insurance Oversight Act, is one of the most important enactments for the insurance industry. The revision of the Insurance Policies Act (ICA) was approved by Parliament in the final vote on 19 June 2020. The revised law strengthens the rights of insured persons and brings policy processing and solutions into the digital age. The revision is scheduled to come into force on 1 January 2022.

The following is an overview of the most important improvements for customers with existing insurance policies:

The revised law is more compatible with e-commerce in that the text form now applies to communications and notifications in connection with the insurance policy, without an explicit need for a signature.

Reductions in benefits are only allowed to the extent that the breach of the duty of disclosure has affected the size of the loss.

In the event of a significant reduction in risk, policyholders can demand a lower premium. They now also have the option instead to terminate the policy.

In the event of a disputed obligation to pay benefits, the insurer must make an advance payment up to the amount of the undisputed amount.

In the event of a breach of obligation, no disadvantage arises if this has had no influence on the occurrence of the claim and on the scope of the benefits due.

Claims arising from an insurance policy become time-barred in five years instead of two years (however, there is still a two-year limitation period in the case of collective daily sickness benefits insurance).

Liability insurance covers both the compensation claims of the injured parties and the recourse claims of third parties.

This means recourse and compensation claims by third parties for benefits they have paid to the injured parties are now also automatically covered for employees.

In liability insurance, the law gives injured third parties the right to directly lodge a claim against the liable person’s insurance company.

Verlingue reached an agreement with several insurance companies for them to apply the consumer-friendly provisions to existing policies from 1 January 2022 onwards, without the need for an amendment to the policy in the short term.

Where this could not be implemented, Verlingue will examine in the coming weeks whether an immediate or subsequent policy amendment is needed. The customers concerned will be contacted by their relationship manager.

Urs Schär
COO / Mitglied der Geschäftsleitung