Life Insurance Bond

Life Insurance Bond

Life insurance: compulsory explanation, contract and pre-contractual obligations
Before the conclusion of the life insurance contract, the insurer as well as the insurance intermediaries are bound by an obligation to inform and to advise their clients. The penalties for non-compliance with these obligations can be quite severe: from the remittance of funds paid (often with interest) to legal proceedings. What should I know about the obligations of insurers in matters of life insurance?

Pre-contractual obligations of the insurer: what are they?
The insurer's obligation to inform
The duty of advice on the part of the insurer
Penalties for the insurer in the event of a breach
The pre-contractual obligations of the insurer
The information obligation

Before the conclusion of the life insurance contract, the insurer is bound by an information obligation. On this point, article 112-2 of the Insurance Code is clear: "the insurer must provide an information sheet on the price and guarantees before entering into the contract. Before the contract is concluded, the insurer gives the insured a copy of the draft contract and its supporting documents or an information notice on the contract which precisely describes the guarantees with exclusions, as well as the obligations of the insured ... "

To summarize, before the conclusion of the life insurance contract, the insurer must provide you with at least 2 documents: an information sheet and a draft insurance contract in addition to the appendices. These 2 documents must be given to you as of right, that is to say without prior request. If the contract is not governed by national law, an additional information sheet must be given to you. The latter should include details of the procedure to be followed in the event of claims as well as information on the company providing the coverage.

The duty to advise

In addition to the obligation to provide information, the insurer also has a duty to advise the policyholder. This new obligation came into being on July 1, 2010. It requires the insurer to do its best to understand the expectations of the underwriter. He must also make his future client understand what he can expect from his insurance. Finally, he advises the insured on the choices he should make in terms of guarantees in relation to his needs.

To carry out its task, the insurer must collect several pieces of information about its client: its knowledge of financial products, its expectations in terms of savings, its financial capacity, its level of income, its balance sheet, etc. This information will be contained in a document signed by both parties and may serve as proof in the event of a dispute.

What are the penalties for failure by the insurer to meet these obligations?
Failure by the insurer to fulfill its pre-contractual obligations may result in sanctions against it. However, these penalties are not provided for by law. Rather, they are fixed by case law and can range from the payment of the payments made by the subscriber for his contract (with legal interest in the event of delay in execution) to the cancellation of the contract and even the engagement of his civil liability. .

You will understand that failure to comply with the insurer's pre-contractual obligations can be very costly. Note, however, that the duty to advise is an obligation of means and not of result. The insurer will be exonerated from its liability if it proves that it has done everything possible to help its client.