Thursday, 24 September 2020

Increased insurer obligations in the scope of the exceptional and temporary regime concerning the insurance contracts

VolverOn June 23, ASF issued the Regulatory Standard 8/2020-R, in which increases insurer obligations arising from the exceptional and temporary regime concerning the insurance contracts, set forth by Decree-Law no. 20-F/2020 of May 12.

Concerning the information obligations, the Regulatory Standard 8/2020-R sets forth that insurers must disclose to their clients the exceptional and temporary regime concerning insurance contracts on the customer service locations and their home pages of their websites, as well as on mobile apps, if applicable. Moreover, insurers must have a Q&A section on their websites about the application of this exceptional and temporary regime concerning insurance contracts and with the preferable contacts to be used by the clients to ensure that all their questions are answered. If the insurers decide so, their distribution channels can also be used to promote the referred measures.

It is, however, worth to mention that this obligation to disclose and to inform solely applies to the measures in the scope of the exceptional and temporary regime concerning the insurance contracts, which can be executed by the insurer depending on their operation.

As to mandatory insurances, ASF warns that this information provided by the insurer to its clients, must be supported continuously using the means that are usually used for communicating with the policyholder, preferably trough digital means.

Furthermore, in what concerns to the diligence obligation, whenever a policyholder requests the application of any of the measures of the exceptional and temporary regime concerning insurance contracts, the insurer must reply within a maximum of 10 working days as from the request date. In the event that the insurer refuses to apply the measure requested by the policyholder or suggests different applicable measures, the insurer’s reply must be duly justified with its respective grounds.

As to the report obligation, insurers must provide the following information to ASF by the fifth working day of each month:

a) Number of contracts where there were changes to the insurance premium payment regime, agreed between the parties, and its proportion in terms of the whole insurance contract portfolio;

b) Number of mandatory insurance contracts covered by the automatic renewal regime, and the its proportion in terms of the whole insurance contract portfolio;

c) Number of insurance contracts where there was a significant premium reduction or activity suspension, the average percentage of its reduction, and the its proportion in terms of the whole insurance contract portfolio;

d) Number of insurance contracts where premium payment concerning the current annuity was executed in parcels, without any additional costs, and the its proportion in terms of the whole insurance contract portfolio;

e) In cases where the measures applied have determined the repayment of a part of the premium, information about the impact of such repayment on taxes or contributions related to the premium during the reference period of the report.

In addition to this information, the insurer must also report to ASF, qualitative and quantitative information about any other measures that the insurer has adopted that affects the insurance contract or the respective premium in the scope of the COVID-19 pandemic and that do not arise from the exceptional and temporary regime concerning insurance contracts.

In addition, the first report must be sent to ASF until July 20, 2020, for the period between May 13 and June 30, 2020. As to the qualitative and quantitative information about any other measures that the insurer has adopted and that are not set forth by the exceptional and temporary regime concerning insurance contracts, the first report can pertain to a period before May 13, 2020.

The Insurance Law Department of Belzuz Abogados S.L.P. – Sucursal em Portugal has an extensive experience in providing legal assistance to the national and international insurers and can become an important assistance when it comes to the implementation and compliance with the obligations set forth by the Regulatory Standard no. 8/2020-R, as well as with the institutional relationship with ASF.

 Luis Filipe Faria Luis Filipe Faria 

Insurance Law department | Portugal

 

Belzuz Abogados SLP

This publication contains general information not constitute a professional opinion or legal advice. © Belzuz SLP, all rights are reserved. Exploitation, reproduction, distribution, public communication and transformation all or part of this work, without written permission is prohibited Belzuz, SLP.

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