d) Other legal sources of private Greek insurance law are:
- Legislative Law 551/70 (insurance of ships and aircrafts),
- Codified Law 489/76 (obligatory third party liability insurance for vehicle accidents) as amended and codified by Presidential Decree 237/86 and by Law 4261/2014 to bring them into line with EU law,
- Law 1796/88 (insurance of export credit),
- Law 3029/02 (professional insurance),
- Codified Law 2190/20 (Sociétés Anonymes),
- Law 2251/94 (consumers protection),
- the Civil Code and various other enactments, which act supplementary, since Insurance Law is by no means independent from general contract law.
Is there any State supervision of Greek private insurance undertakings?
Under Law 3867/2010 the national authority which supervises and monitors the establishment and operation of insurance companies and insurance intermediaries is the Bank of Greece (Department of Private Insurance Supervision – DOPIS), which undertakes most of the responsibilities of the Private Insurance Supervisory Committee (PISC), a legal entity in public law, subordinated to the Ministry of Finance. One of the most important regulatory actions of the Bank of Greece is the Act 31/2013 (Conduct of Insurance Mediation).
What are the requirements for the establishment of an insurance company in Greece?
Insurance business can be undertaken only by insurance companies, which must have the form of a Société Anonyme. The scope of its activities is tightly restricted in the insurance sector (article 14, paragraph 1c of draft law on Solvency II). The capital of a Greek insurance company may be no less than € 2,.500,000 for non-life insurance undertakings (but if motor vehicle liability, aircraft liability, liability for ships and general liability, as well as credit and suretyship is included, the capital may be no less than € 3,700,000) and € 3,700,000 for life insurance undertakings (article 102 of the draft law on Solvency II).
The members of the Board of Directors of a Greek insurance company have greater liabilities by comparison with those of a common Sociétés Anonymes. They are liable for every fault, unless they can prove that they have exercised due diligence in their duties. They are not exempt from liability against the company, even if the Shareholder’s Meeting approves in retrospect their acts or omissions. They are personally liable for any deficit arising from bankruptcy of the insurance company (article 3 of Law 1380/1983).
What is the procedure for the granting of an insurance license?
In order to exercise their activities Greek insurance companies must obtain a license from the Bank of Greece. By the so called “Third Generation Directives” the principle of the “single and entire” license for insurance companies has been established. This means that the license is valid in all EU member states. The license is granted per class of insurance, either for all or for part of the risks of each class. A given insurance company may not offer both life and non-life insurance at the same time (article 48, paragraph 1 of draft law on Solvency II). However, article 48, paragraph 2 of the same Law sets some exceptions to this rule.
Who are the parties to a private insurance contract?
The parties are a) the insurer (Insurance Company), b) the insured, who may, at the same time, be the person who pays the premium (policy holder) and receives the insurance indemnity, as in the case of fire insurance. However, these two capacities need not coincide. For example, in personnel group insurances the employing company is the policy holder and pays the premium but the beneficiaries are the members of the personnel. Also, in life insurance there is always a beneficiary who, in case of death of the insured, receives the insurance indemnity and who, obviously, is different from the insured who pays the premium.
What is the nature of a private insurance contract?
A private insurance contract is not a wagering contract, it is an indemnity contract. Both contracts pay a sum of money upon the outcome of an uncertain event. However, in a wagering contract neither of the contracting parties has any other interest than the sum at stake which he will win or lose according to that outcome. By contrast, in a contract of private insurance, the insured has an interest in the subject matter of the insurance in respect of which he may suffer loss. Thus in a private insurance contract the insured must stand in some relation, recognized by law, to the insured object, the so called insurable interest. For example, if someone were to insure the house of his neighbor, with whom he has no legal connection, there would be no insurable interest on the part of the insurer. Under Greek law such insurance is null and void.
What are the implications if an insurance company does not have a legal license?
An insurance company may conduct private insurance business and undertake insurance risks only if it has a legal license. Providing insurance cover by a company without such license is prohibited and entails administrative fines and criminal penalties. Such insurance policies are null and void. However this nullity cannot be plead against an innocent party (article 10, paragraph 1 of draft law on Solvency II).
What are the minimum requirements which should be included in a private insurance contract?
According to article 1, paragraph 2 of Law 2496/1997 an insurance contract must stipulate at least the following:
- The names and other data (address etc.) of the contracting parties and the beneficiary, if the latter is a different person from the policy holder
- The duration of the insurance
- The subject matter insured and its value
- The insured perils
- The maximum liability of the insurance company (sum insured)
- Any exclusion clauses which narrow the scope of the insurance cover
- The insurance premium
- The applicable law, if this is not Greek law.
Furthermore, according to article 2 of Law 2496/97,
- An insurance policy must always be concluded in writing (paragraph 1)
- The signature of the insurer may be printed by electronic mean (paragraph 1)
- The insurance policy must state the place and the date of issue (paragraph 3)
- The insurance policy must mention the general and special terms which are applicable to the cover (paragraph 4)
- All the terms and conditions of the insurance policy must be clearly and legibly written (paragraph 8).
What are the policy holder’s obligations?
- To disclose any material information prior to the conclusion of the insurance contract. If the policy holder fails to exercise his disclosure duties the insurer has the right to terminate the insurance contract.
- During the insurance period the policy holder is obliged to declare to the insurer any event which may increase the insured risk in such a way that if the insurer was aware of the event he would not have concluded the insurance. The declaration should take place within fourteen (14) days from the time the event came to the insured’s attention (article 4, paragraph 1 of Law 2496/97). As soon as he discovers the deterioration the insurer may either cancel the insurance policy or request amendment of the insurance terms (article 4, paragraph 2 of Law 2496/97). These provisions do not apply in life and medical insurance policies (article 4, paragraph 3 of Law 2496/97).
- The policy holder is obliged to pay the insurance premium, either as a lump sum or by installments. In case of delay of payment of the insurance premium the insurer has the right to address a written cancelation notice to the insured, the effect of which starts one (1) month after the notification (article 6 of Law 2496/97).
- The policy holder must notify the insurer within eight (8) days of the occurrence of the insured peril. He is further obliged to provide all required information, data and documents
- in respect of the event (article 7, paragraph 1 of Law 2496/97).
- The policy holder must take all necessary measures to mitigate the occurrence of the peril and must act as prudent uninsured (article 7, paragraph 3 of Law 2496/97).
- The policy holder must not exhibit willful misconduct or make false representations to the insurer.
What is the object of Non-Life Insurance?
In non-life Insurance the insurer indemnifies the insured against the occurrence of an insured peril concerning the subject matter insured. The classes of non-life insurance are specified in article 4 of draft law on Solvency II. The claim may include damage or loss of goods or property, pecuniary benefits in case of accident or sickness, liabilities arising out of the use of motor vehicles, aircraft, ships etc., as well as the costs of defending relevant claims. The indemnity should not exceed neither the extend of the damage nor the sum insured.
How is the insurance indemnity calculated in insurance of goods?
Unless otherwise agreed, the insurance indemnity is calculated on the basis of the current value of the goods. If this is not known, the indemnity is calculated on the common value of the goods at the time of the occurrence of the insured peril. However, the parties may effect a valuation of the goods, and conclude to an agreed value in the insurance policy (declared value).
If the declared value of the goods is lower than their current or their common value, the obligation of the insurer is limited to the declared value. If the declared value of the goods is higher than their current or their common value, the insurer is not liable for the amount of over insurance.
In case of partial loss there is a pro rata payment of the insurance indemnity.
In insurance of transportation of goods what is the insurer’s liability in case of willful misconduct or gross negligence of the transporter?
The insurer is still liable to the insurance indemnity, since the insured has no control over the transportation (article 20, paragraph 2 of Law 2496/97).
What are the main terms and conditions of Life Insurance?
- In the case of life insurance the insurer pays an indemnity either as a lump sum or by installments, in order to make good a loss due to accident or disease occurring to the insured. Life insurance may be agreed for covering the risk of death or as insurance of the survivor or both.
- The insurance policy is strictly personal. A beneficiary is appointed in writing and this appointment may be revoked at any time.
- If there is no beneficiary it is presumed that the beneficiary is the policy holder and his heirs are entitled to the insurance indemnity after his death.
- The beneficiary cannot assign the insurance indemnity to another person without the written consent of the policy holder.
- In case of life insurance of a third party the insurance is null and void unless there is a written consent for this insurance from the third party. Furthermore, the beneficiary cannot assign the insurance indemnity without the written consent of the third party, if such party has the right to appoint a beneficiary.
- The age of the insured person is a material factor for the assessment of the risk.
- If the insured person has committed suicide the insurer is obliged to pay the insurance indemnity, provided that the insurance policy has lasted more than two (2) years.
- The beneficiary is not entitled to the insurance indemnity if he provoked the death of the insured or intended to cause the death of the insured.
- In case of accident the insurance indemnity comprises bodily injury arising from external, violent sudden cause, without the intention of the insured, which results in a partial or total, temporary or permanent incapacity, need for hospitalization or death. If there are other insurances covering the insured against accident the insurer must be notified. Breach of this obligation gives the right to the insurer to cancel the insurance within a period of one (1) month from the date he learned of the breach.
- In case of insurance of Diseases (medical insurance) the insurer does not indemnify pre-existing diseases, except in the case that the insured was justifiably ignorant of the existence of such diseases.
What is the «Private Life Insurance Guarantee Fund»?
It is a legal entity, established under Law 3867/2010, in which all the Greek insurance companies which are active in life insurance are members. Its purpose is dual: It acts as «special liquidator» in order to facilitate the transfer of an insolvent company’s life portfolio. If this is not possible it undertakes payment of Life insurance indemnities against pending claims.
Is vehicle insurance compulsory in Greece?
Only third party liability insurance for vehicles is compulsory in Greece (Law 489/1976, as in force).
What is the «Auxiliary Fund for Vehicles»?
It is a legal entity established under Law 489/76, in which all Greek insurance companies that conclude third party liability insurance for vehicles are members. The participation is compulsory. The purpose of this establishment is to cover third party damages caused by vehicles which are uninsured, unidentified or insured with companies whose license has been withdrawn due to violation of the law.
What is the «Motor Insurer’s Bureau»?
It is a legal entity, established by Law 489/76, which, in cooperation with the Auxiliary Fund of Vehicles, enhances the institution of compulsory Third Party Liability insurance for vehicles. It undertakes a) settlement of claims on behalf of foreign Motor Insurers’ Bureaux or foreign insurers, for accidents in Greece caused by vehicles from other states which are members of the Green Cards System and b) guarantees settlement of damages caused by Greek vehicles to third parties abroad. The Motor Insurers’ Bureau issues Green Cards.
What is recognized as insurance mediation in Greece and by whom it is exercised according to Greek Law?
Insurance mediation is any activity of presenting, proposing and providing services for the purpose of introducing and/or concluding an insurance contract. It also includes the provision of services during the operation of insurance contracts, mainly the handling of insurance claims. Insurance mediation is exercised by insurance intermediaries who can be either physical or legal persons. Their function and role is important in the process of selling insurance products. They facilitate both insurers (i.e. by introducing new clients) and insurance customers (i.e. by ensuring that the client receives proper information, by reducing customer’s search costs etc.).
Activities are not considered to be insurance mediation if they are exercised by insurance companies, or by personnel of insurance companies acting in the services of said companies, or if such activities are provided on an occasional basis in the context of different professional activities. These different activities should not include (a) assistance to the clients in concluding or operating insurance contracts, (b) professional management of insurance claims, (c) appraisals and adjustments of insurance claims (article 2, paragraph 3 of Presidential Decree 190/2006). The above conditions also apply to re-insurance mediation (article 2, paragraph 4 of PD 190/2006).
According to Greek law insurance intermediaries are:
- Insurance and re-insurance Brokers: persons who exercise insurance or re-insurance mediation, without acting on behalf of a specific insurance company (article 2, paragraph 5 & 6 of PD 190/2006).
- Insurance or re-insurance Agents: persons acting on behalf of one or more insurance or re-insurance companies. The insurance Agents are not entitled to receive any premium, or to receive any insurance indemnity and they act entirely as representatives of the insurance company(ies) that they represent.
- Insurance Consultants and
- Coordinators of Insurance Consultants
All insurance intermediaries must be registered with the Professional Chamber of their professional address (article 3 of PD 190/2006).
To be so registered insurance intermediaries, must submit the documentation provided by article 4 of PD 190/2006. Any physical person, either Greek resident or resident of another EU member state, acting as insurance intermediary without having been registered in the
relevant Professional Chamber, is subject to the sanctions provided by article 175, paragraph 1 of Greek Penal Code (unless there are heavier sanctions provided by other Greek laws) and to an administrative fine up to € 50,000, imposed subject to the justified decision of the Minister of Development, after prior assessment of the violation by the competent authority. In case of legal person, the fine is attributed to its legal representatives (article 9, paragraph 1 of PD 190/2006).
Is there any protection against misconduct of insurance intermediaries?
Any insured person, either policy holder or beneficiary, as well as consumers’ unions and any person who has an interest in this respect can submit a written complaint to the Supervisory Committee of Private Insurance against any insurance or re-insurance intermediary
for acts or omissions which constitute breaches of the Greek legislation regarding insurance mediation, or which violate moral and trading ethics or are contrary to public order. The Supervisory Committee of Private Insurance may impose sanctions on the insurance intermediaries after the issue of a justified report (article 10 of PD 190/2006).
All insurance or re-insurance intermediaries are obliged to maintain errors and omissions insurance of at least € 1,000,000 per claim and € 1,500,000 in the aggregate per year (article 4, paragraph 6 of PD 190/2006).
