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Trust and Transparency in Insurance Contract Law: European Regulation and Comparison of Laws

Published online by Cambridge University Press:  12 May 2023

Abstract

The aim of this paper is to examine transparency principles under English and German Law, EU acquis and PEICL and to answer the question whether current legal regulation reflects high standards of transparency requirements and offer adequate consumer protection. The author is particularly interested in investigating are there any typical, common or shared characteristics in the regulation of transparency requirements across these jurisdictions. The focus of this paper is on consumer insurance contracts only. The main argument is that through transparency we can build consumer's trust in insurance market and offer adequate consumer protection.

Type
Research Article
Copyright
Copyright © The Author(s), 2023. Published by Cambridge University Press on behalf of Centre for European Legal Studies, Faculty of Law, University of Cambridge

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Footnotes

1

Dr Ana Keglević Steffek, LLM (London), Senior Lecturer in Law, Anglia Law School, Anglia Ruskin University, Cambridge; Director of ARU Centre for Access to Justice and Inclusion. Email: ana.keglevic-steffek@anglia.ac.uk All websites are up to date as of the date of the paper submission to the publisher.

References

2 Such as the ‘information model’ adopted by the EU in order to protect consumers. This has been accepted in Consumer Rights Directive 2011/83/EU (amended by Directive (EU) 2019/2161) and EU consumer acquis in general. For the consumer acquis, see note 37 below.

3 Wöss, S, ‘Transparency in the Insurance Contract, Law of Austria’ in Marano, P and Noussia K, K (eds), Transparency in Insurance Contract Law (Springer, 2020), p 4Google Scholar. The book offers overview of country reports in the EU and wider.

4 Particularly pioneer Directive 93/13/EEC on Unfair Terms in Consumer Contracts.

5 Ibid, n 3.

6 Wöss, n 3.

7 For the overview of common law and civil law, see Transparency in Insurance Contract Law, note 3 above.

9 Wandt, MTransparency as General Principle of Insurance Law’ in Transparency in Insurance Law (AIDA, 2012)Google Scholar.

10 Ibid, pp 16–20.

11 Ibid, pp 20–21.

12 Van Rossum, A, ‘Ethics, Governance, Trust and Customer Relations’ (2004) 29(1) The Geneva Papers on Risk and Insurance — Issues and Practice, pp 5255CrossRefGoogle Scholar.

13 See M Zboron, Insurance Underwriting and Broking in the London Insurance Market: The Role of Reputation and Trust in the Insurance Decision Making Process (PhD thesis, University of Southampton, 2015).

14 ‘Financial Lives Survey 2020 Key Findings’, FCA, p 140. https://www.fca.org.uk/publications/research/financial-lives-2020-survey-impact-coronavirus.

15 Ibid, p 140.

16 Ibid, p 141.

17 Consumer Insurance (Disclosure and Representations) Act 2012, https://www.legislation.gov.uk/en/ukpga/2012/6?view=extent.

20 Gesetz über den Versicherungsvertrag (VVG), 30 Mai 1908 (RGBl. S. 263).

21 Gesetz über den Versicherungsvertrag (VVG), 23 November 2007 (BGBl. I S. 2631), https://www.gesetze-im-internet.de/vvg_2008.

22 VG-Informationspflichtenverordnung (VVG-InfoV), 18 Dezember 2007 (BGBl. I S. 3004), https://www.gesetze-im-internet.de/vvg-infov.

23 Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the Taking-Up and Pursuit of the Business of Insurance and Reinsurance (Solvency II) [2009] OJ L335, 17, 12.2009.

24 Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on Insurance Distribution [2016] OJ L26, 02.02.2016.

25 PEICL (ed), Principles of European Insurance Contract Law (Sellier European Law Publishers, 2009). Many resources are available on www.peicl.org.

26 Ibid, p lii.

27 See ‘European Insurance in Figures’, Insurance Europe Statistics (2020), https://insuranceeurope.eu/publications/2569/european-insurance-in-figures-2020-data. The numbers are showing that Germany and the UK have the highest number of insurance companies and employees by country (p 60) and are among the countries with the highest total premiums per capita by country (density, p 39).

28 For dissussion, see H Heiss and U Mönnich, ‘Pre-contractual Duties in European Insurance Contract Law’ in Y Q Han and G Pynt (eds), Carter v Boehm and Pre-contractual Duties in Insurance Law – A Global Perspective after 250 Years (Hart Publishing, 2018), pp 382–387.

30 For dissussion, see M Wandt and K Bork, ‘Pre-contractual Duties under the German Insurance Law', in Carter v Boehm and Pre-Contractual Duties in Insurance Law – A Global Perspective after 250 Years, note 28 above, pp 279–286.

31 This follows from the EU acquis. For example, additional information is also provided in Article 36 of Directive 2002/83/EC Life Insurance (Consolidation Directive) [2002] OJ L345 19.12.2002 Article 8 of Directive 2009/103/EC Fourth Motor Vehicle [2009] OJ L263, 16.09.2009, or Article 3 of Directive 2002/65/EC of the European Parliament and of the Council Concerning the Distance Marketing [2002] OJ L271, 09.10.2002.

32 Particularly by Article 31 of the Third Non-Life Insurance Directive (92/49/EEC) and Article 36(2) of the Life Assurance Consolidation Directive (2002/83/EEC).

33 Particularly by Preamble 79 and Articles 183–186 of the Directive 2009/138/EC, note 23 above.

34 In Germany, Section 7 VVG was very much influenced by the Third Consolidated Life Directive (2002/83/EEC) and the Non-Life Directive (92/94/EEC), but major influence may be awarded to the Distance Marketing Directive (2002/65/EC). In England, the most noticeable influence on the consumer insurance contract is made by the Unfair Contract Terms Directive (93/13/EEC).

35 For an overview in PEICL, see Heiss and Mönnich, note 28 above.

36 PEICL Art 2:201, Comment C1.

37 The same approach to information duties is evidenced by the Package Travel Directive (90/314/EEC, Arts 3–4), Distance Contracts Directive (97/7/EC, Arts 4–5), Distance Marketing Directive (2002/65/EC, Art 3), Timeshare Directive (2008/122/EC, Arts 3(1), 4(1), 5(2)), Consumer Credit Directive (2008/48/EC, Art 5), but also in the proposal for a Directive on Consumer Rights (Art 5) and the Unfair Contract Term Directive (93/13/EEC).

38 CIDRA is a short and targeted Act (only twelve provisions) and it only deals with the consumer insurance contracts. CIDRA is based on The Law Commission, Consumer Insurance Law: Pre-contract Disclosure and Misrepresentation, Draft Bill (LAW COM No 319), December 2009 [hereinafter Draft Bill].

39 Carter v Boehm, (1776) 3 Burr 1905, 1909–1910.

40 Same, J Birds, Birds’ Modern Insurance Law (Sweet & Maxwell/Thomson Reuters, 2019), pp 156–58Google Scholar.

41 Merkin, R, Lowry, Rawlings and Merkin's Insurance Law – Doctrines and Principles (Hart, 2022), p 86Google Scholar.

42 Merkin, R (ed), Colinvaux's Law of Insurance (Sweet & Maxwell/Thompson Reuters, 2022), para 7-001Google Scholar.

43 CIDRA Clause 2(1–3); Carter v Boehm and Pre-Contractual Duties in Insurance Law – A Global Perspective after 250 Years, note 28 above.

44 They are very influential documents, often mandatory for the members of the insurance associations.

45 The first ABI Statement of General Insurance Practice and Statement of Long-Term Insurance Practice was published in 1957, amended in 1986, and in force until 2005. Text available at: www.lawcom.gov.uk/insurance_contract_law_issues_paper_1.pdf; www.scotlawcom.gov.uk/downloads/cpinsurance_issue1.pdf.

46 The Financial Services Authority (FSA) was established by the Financial Services Markets Act in 2000 as the single statutory regulator for financial services. FSA published a Handbook containing special rules for consumer insurance: Insurance Conduct of Business Sourcebook - Rules on Non-disclosure and Misrepresentation (FSA Handbook - ICOBS Rules), https://fsahandbook.info/FSA/html/handbook/ICOBS. See R Purves, ‘The Impact of FSA Regulation’ in P J Tyldesley (ed), Consumer Insurance Law: Disclosure, Representations and Basis of Contract Clauses (Bloomsbury, Professional, 2013), pp 91–129.

47 ‘FCA Handbook’, Financial Conduct Authority, https://www.handbook.fca.org.uk/handbook.

48 M Collet, ‘The Financial Ombudsman Service, The History and Development of Its Approach to Non-disclosure’ in Consumer Insurance Law, note 46 above, pp 129–165.

49 See Recommendations for the Draft Bill, note 38 above, para 2.48.

50 Birds, J, Insurance Law in the United Kindom (Kluwer Law International, 2015), p 27Google Scholar; Birds’ Modern Insurance Law, note 40 above, p 126.

51 The Law Commission has taken the practice of FOS as the starting point to draft the proposals for a reform because in most cases the consumers are able to obtain justice from the FOS and not from the court. But the FOS cannot decide all cases. The compulsory jurisdiction is limited to awards of £100.000 and the FOS declines cases that require witnesses to be cross-examined. See Recommendations for the Draft Bill, note 38 above, para 3.2; P J Tyldesley, ‘Consumer Insurance and the Duty of Disclosure’ (2011) 123 British Insurance Law Association Journal, p 48.

52 Directive (EU) 2016/97, note 24 above, p 19.

53 Commission Implementing Regulation (EU) 2017/1469 of 11 August Laying Down a Standardised Presentation Format for the Insurance Product Information Document, http://eur-lex.europa.eu/eli/reg_impl/2017/1469/oj.

54 PEICL Art 2:201, Comment C1; MüKo 2010/Prölss, Versicherungsvertragsgesetz, § 7, Rdn 2.

55 R Cooter and T Ulen, Law and Economics (Barkley Law Books, 2016), p 41.

56 The term ‘information asymmetry’ was established by G Akerlof, ‘The Market for “Lemons”: Quality, Uncertainty and the Market Mechanism’ (1970) 84 Quarterly Journal of Economics, pp 488–500.

57 PEICL Art 2:201, Comment C1.

58 Cooter and Ulen, note 55 above, p 41.

59 ‘FCA Handbook’, note 47 above, ICOBS, https://www.handbook.fca.org.uk/handbook/ICOBS/6/?view=chapter.

60 See one of the pioneers: E Mackaay, Economics of Information and Law (Kluwer, 1982), p 177.

61 The body of literature inspired by the work of Daniel Kahneman and Amos Tversky captured the name of behavioural economics. See also E Zamir and D Teichman (eds), The Oxford Handbook of Behavioral Economics and the Law (Oxford University Press, 2016); T Baker, Uncertainty - Risk: Lessons for Legal Thought from the Insurance Runoff Market (Faculty Scholarship at Penn Carey Law, 2021), p 2141.

62 This theory has been under attack for the past 30 years based on mainly empirical evidence. See more, Cooter, Ulen note 55 above, p 50.

63 Ibid.

64 Ariely, D, Predictably Irrational: The Hidden Forces that Shape Our Decisions (Harper Collins, 2016)Google Scholar.

65 See Kunreuther, C K, Pauly, M V, and McMorrow, S, Insurance and Behavioral Economics: Improving Decisions in the Most Misunderstood Industry (Cambridge University Press, 2013)CrossRefGoogle Scholar.

66 FCA, ‘A New Consumer Duty Feedback to CP21/36 and Final Rules’, Policy Statement PS22/9, July 2022, https://www.fca.org.uk/publication/policy/ps22-9.pdf.

67 FCA, ‘A New Consumer Duty Feedback to CP21/36 and Final Rules’, Made Rules (Legal Instrument), Appendix 1, para 2.1.1, https://www.fca.org.uk/publication/consultation/cp21-13.pdf.

68 See FCA, ‘A New Consumer Duty’, First Consultation Paper CP 21/13, May 2021, https://www.fca.org.uk/publication/consultation/cp21-13.pdf.

70 FCA, ‘A New Consumer Duty Feedback to CP21/36 and Final Rules’, Policy Statement, note 66 above, para 1.6.

71 Ibid, para 1.14.

72 Ibid.

73 Ibid, para 8.1.

74 FCA, ‘A New Consumer Duty Feedback to CP21/36 and Final Rules’, Made Rules, note 67 above, Appendix 1, para 2A 1.10(3).

75 Ibid, para 2A 1.9.

76 And for closed products and services from 31 July 2024: FCA, ‘A New Consumer Duty Feedback to CP21/36 and Final Rules’, Policy Statement, note 66 above, para 1.57.

77 Ibid, paras 1.21, 1.22.

78 The exception is insurance against mass risks and insurance negotiated via insurance broker (§6.4–6 VVG)

79 See Art 20 Directive (EU) 2016/97 on Insurance Distribution, note 24 above; PEICL Art 2:202, Comment C1–3.

80 See PEICL Art 2:202, Comment C2.

81 Wandt, M and Bork, K, Disclosure Duties in German Insurance Contract Law (ZVersWiss 109, 2020), p 89CrossRefGoogle Scholar.

82 Ibid. With regard to risks related to premature terminations of existing life insurance contracts and the conclusion of new life insurance contracts: cf BGH, VersR 2015, pp 107–09; cf OLG Hamm, r+s 2013, pp 523–24; OLG München, VersR 2012, pp 1292–95; OLG Hamm, VersR 2016, pp 394–97 (change of health insurance); OLG München, VersR 2016, pp 318–20. With regard to risks resulting from underinsurance if a reduction of the respective sum insured is intended: OLG Karlsruhe, VersR 2013, pp 885–88; cf BGH, VersR 2014, pp 625–28.

83 Disclosure Duties in German Insurance Contract Law, note 81 above, p 89.

84 PEICL Art 2:202, Comment C4(c)–(d).

85 For details, see J Birds, B Lynch, and P Simon (eds); MacGillivray on Insurance Law (Sweet & Maxwell/Thompson Reuters, 2022), p 478; Birds’ Modern Insurance Law, note 40 above, p 126.

86 Carter v Boehm, note 39 above.

87 This was established in the landmark English case Carter v Boehm, note 39 above.

88 About human processing of information, see Mackaay note 60 above, pp 119 et seq.

89 Draft Bill, note 38 above, para 2.29 et seq.

90 Ibid, para 2.48.

91 Insurance Law in the United Kindom, note 50 above, p 27; Birds’ Modern Insurance Law, note 40 above, p 126.

92 It must be noted that CIDRA did not regulate the consumer post-contractual duties, nor insurer's pre- and post-contractual duties. Thus, in principle, the common law and MIA 1906 are capable of extending to those. However, Insurance Act 2015 amended Section 17 of MIA 1906 by removing the remedy of avoidance. As a result it is not possible for insurers to ask for the avoidance of a contract for breach of duty of utmost good faith nor for the breach of post-contractual disclosures. Colinvaux's Law of Insurance, note 42 above, p 308.

93 CIDRA Clause 2(1–3). For further discussion, see Explanatory Notes – Clause 2; A. 8–10, Recommendations for the CIDRA Draft Bill, note 38 above, paras 5.33–40. See Y Q Han, ‘Pre-contractual Duties in the UK Insurance Law after 2015: Old (or New?) Wine in New Bottles?’ in Carter v Boehm and Pre-Contractual Duties in Insurance Law – A Global Perspective after 250 Years, note 28 above, p 150.

94 CIDRA Clause 2(1), Recommendations for the CIDRA Draft Bill, note 38 above, para A8.

95 As of the date of the preparation of this text, there has been only a restricted number of cases acknowledging CIDRA, including: by the Court of Session (Outer House) in Southern Rock Insurance Co Ltd v Hafeez [2017] CSOH 127; [2017] Lloyd's Rep IR 207; [2021] EWHC 1320 (Comm); by HHJ Cotter QC in Ageas Insurance Ltd v Stoodley [2019] Lloyd's Rep IR.1; by HHJ Pelling in Jones v Zurich Insurance PLC [2021] EWHC 1320 Comm; and by HHJ Simpkiss in Tesco Underwriting Ltd v Achunche [2016] EWHC 3869 QB; appeal in Asfaq v International Insurance Co of Hannover Plc [2017] EWCA Civ 357; [2018] Lloyd's Rep IR 228 briefly referred to CIDRA; as did Court of Session (Outer House) in Young v Royal and Sun Alliance Plc [2019] CSOH 32; and Judge Jay in R on the application of Aviva Life and Pensions (UK) Ltd v Financial Ombudsman Service [2017] EWHC 352 (Admin); Judge Akenjead briefly mentioned CIDRA (without deciding on the latter) at pp 35 and 38 in Genesis Housing Association Ltd v Liberty Syndicate Management Ltd [2012] EWHC 3105 (TCC); [2012] 2 CLC 837; brief mention by the Supreme Court also in Versloot Dredging BV v HDI Gerling Industrie Versicherung AG [2016] UKSC 45; [2017] AC at 102; MacGillivray on Insurance Law, note 85 above, p 597 n 5.

96 For the notion of “old” and “new” regimes, see H A Cousy, ‘The Principles of the European Insurance Law: The Duty of Disclosure and the Aggravation of Risk’ (2008) 9 ERA Forum 119, p 120.

97 MüKo 2010/Langheid, Versicherungsvertragsgesetz, § 19(1), Rdn 57.

98 Transparency in Insurance Contract Law, note 3 above, p 288.

99 For dissussion, see Heiss and Mönnich, note 28 above, pp 389–91.

100 PEICL Art 2:201, Comment C1.

101 Transparency in Insurance Contract Law, note 3 above, p 289.

102 Although this provision of the § 19(1) sentence 1 VVG altered the old § 16 sentence 2 VVG 1908, the actual insurer test could still be taken into consideration. For explanation of § 19(1) VVG, see MüKo 2010/Langheid, Versicherungsvertragsgesetz, note 97 above, § 19(1), Rdn 8.

103 For discussion, see Heiss and Mönnich, note 28 above, pp 389–91.

104 PEICL, Art 2:101, Notes 1–6.

105 Ibid.

106 Draft Bill, note 38 above, para 2.29 et seq.

107 Examples of cases are given in the Draft Bill, note 38 above, paras 5.42–5.44: English v Dedham Vale Properties Ltd [1978] 1 WLR 93; Roberts v Avon Insurance Co, [1956] 2 Lloyd's Rep 240; Winter v Irish Life Assurance PLC, [1995] 2 Lloyd's Rep 274.

108 Ibid.

109 Colinvaux's Law of Insurance, note 42 above, p 309; R Merkin, Lowry, Rawlings and Merkin's Insurance Law – Doctrines and Principles (Hart, 2022), p 91.

110 Colinvaux's Law of Insurance, note 42 above, p 309.

111 Draft Bill, note 38 above, paras 5.52–5.54; Birds J; Lynch B; Simon P (eds); MacGillivray on Insurance Law, note 85 above, p 605.

112 MacGillivray on Insurance Law, note 85 above, p 605

113 Birds’ Modern Insurance Law, note 40 above, p 127.

114 For a stimulating analysis of these factors, see G Charkham, ‘Reform of Insurance Law: The Consumer Insurance (Disclosure and Representations) Act 2012’ (2013) 25 Insurance Law Monthly, p 41; Consumer Insurance Law: Disclosure, Representation and Basis of Contract Clauses, note 46 above, para 6.9.; Birds Modern Insurance Law, note 40 above, p 127.

115 Draft Bill, note 38 above, para 5.71.

116 For discussion, MacGillivray on Insurance Law, note 85 above, pp 607–608.

117 See M Rothschield and J Stiglitz, ‘Equilibrium in Competitive Insurance Market: An Essay on the Economics of Imperfect Information’ (1976) 90 The Quarterly Journal of Economics p 629.

118 B Soyer, ‘Reforming Pre-contractual Duty of Utmost Good Faith in Insurance Contracts: An Economic Perspective’ (2008) Journal of Business Law, pp 4–5. The author argues that pre-contractual disclosure is the more essential part of the rating process in business insurance contracts, rather than consumer insurance.

119 Mackaay, note 60 above, p 177.

120 Ibid.

121 Ibid, pp 177–79.

122 Cooter and Ulen, note 55 above, p 50.

123 The term is established by pioneer Akerlof, note 56 above, pp 488–500.

124 For information economics study, see H Fleischer Informationsasymmetrie im Vertragsrecht, (CHBeck, 2001).

125 Cooter and Ulen, note 55 above, p 49.

126 Cooter for example suggest some additional tools such as medical or psychological testing, coinsurance or deductible insurance, exclusion of benefits etc. See more, ibid.

127 P Siegelman, Adverse Selection in Insurance Markets: An Exaggerated Threat (Research paper, University of Connecticut, 2003), https://ssrn.com/abstract=434604.

128 N A Doherty and Schlesinger, Rational Insurance Purchasing: Consideration of Contract Non-performance, p 243; Soyer, note 118 above, p 5.

129 Mackaay, note 60 above, p 177.

130 MacGillivray on Insurance Law, note 85 above, p 478; Birds’ Modern Insurance Law, note 40 above, p 116.

131 Joel v Law Union and Crown Insurance Company (1908) 2 KB 863, 884.

132 ‘Die ihm bekannten Gefahrumstände… ’, § 19(1) VVG.

133 MüKo 2010/Prölss, Versicherungsvertragsgesetz, § 19(1), Rdn 57. Before, the VVG Reform insurer had the right to terminate a contract if the insurer fraudulently refrained from gaining knowledge of a material fact (ex, § 16(2) Sentence 2 VVG 1908). This is very similar to the English exception for judgment of policyholder's actual knowledge. Currently, this provision is omitted from the VVG 2008. For legal consequences of this reformed provision and comparison to the English solution, see G Rühl, ‘Common Law, Civil Law and the Single European Market for Insurances’ (2007) 54 International and Comparative Law Quarterly p 892.

134 Rühl, note 133 above, p 892.

135 PEICL Art 2:101, Comment C4.

136 Ibid; Cousy, note 96 above, p 79.

137 PEICL Art 2:101, Comment C7. Heiss and Mönnich, note 28 above, p 391.

138 For further discussion see Colinvaux's Law of Insurance, note 42 above, p 310.

139 Recommendations for the Draft Bill, note 38 above, para 5.36.

140 CIDRA Clause 3(3–4); Draft Bill, note 38 above, Clause 3(3-4), Explanatory Notes – Clause 3; A. 19, For further discussion see Recommendations for the CIDRA Draft Bill, note 38 above, para 5.67–5.90.

141 Draft Bill, note 38 above, para 4.17.

142 For more, see ibid, paras 5.81–5.85.

143 About discussions in Germany VVG Abschlussbericht, pp 36–38; Wrabetz/Reusch, MüKomm VVG, § 23 Rdn. 4; Burmann/Heß, Die VVG-Reform: Alles oder Nichts – das ist (nicht mehr) die Frage, pp 159 et seq.

144 Especially via self-regulatory instruments, such as ABI Statements, ICOBS Rules, or practice of FOS. For English practice, see Draft Bill, note 38 above, paras 2.29 et seq.

145 For German practice, see R Koch, Abschied von der Rechtsfigur der verhüllten Obliegenheit, pp 285–288.

146 Cousy, note 96 above, p 120.

147 Under the earlier MIA 1906 regime, misrepresentation gave a right to a legal remedy only if it would influence the judgement of a hypothetical prudent insurer. CIDRA did not continue with this approach. See MacGillivray on Insurance Law, note 85 above, p 609.

148 Pan Atlantic Insurance Co Ltd v Pine Tom Insurance Co Ltd [1995] 1 AC 501; Colinvaux's Law of Insurance, note 42 above, p 311.

149 Jones v Zurich Insurance PLC, note 95 above, p 44, also citing Lord Mustill in Pan Atlantic, p 551.

150 Ibid.

151 Draft Bill, note 38 above, paras 4.12, 6.13–6.33.

152 Southern Rock Insurance Co Ltd v Hafeez, note 95 above.

153 See also, Draft Bill, note 38 above, Explanatory Notes – Clause 5, A 29–33.

154 Derry v Peek [1889] 14 App Cas 337.

155 Draft Bill, note 38 above, Explanatory Notes, para 39; Report, paras 6.13–6.33. See more MacGillivray on Insurance Law, note 85 above, p 610.

156 One example where this could be possible is a joint insurance policy where only one party acted deliberately or recklessly. Colinvaux's Law of Insurance, note 42 above, p 313.

157 Ageas Insurance v Stoodley, note 95 above; also Colinvaux's Law of Insurance, note 42 above, p 313.

158 Southern Rock Insurance Co Ltd v Hafeez, note 95 above, p 73.

159 This was discussed in Tesco Underwriting Ltd v Achunche, note 95 above, where failure to disclose an earlier conviction following a clear and specific question by the insurer was considered a deliberate or reckless omission; and Ageas Insurance Ltd v Stoodley, note 95 above, on the presumption that a consumer knew that a matter the insurer asked a clear and specific question about was relevant to the insurer.

160 Draft Bill Report, note 38 above, para 4.23. For more examples and explanation see paras 6.34–6.39.

161 Ibid, para 42.

162 See also Draft Bill, note 38 above, Explanatory notes - Clause 5, A 29–33

163 Jones v Zurich Insurance PLC, note 95 above. The claimant stated that he had lost a £190,000 watch while skiing and made a claim under the Zurich insurance policy. He also stated that he had made no such claims in the last five years, which was false. The Court held that Zurich was entitled to avoid the policy under the 2012 Act. But Zurich had to reimburse the premium paid as the Court held that misrepresentation was careless rather than deliberate or reckless.

164 See Colinvaux's Law of Insurance, note 42 above, p 311.

165 Confirmed in Jones v Zurich Insurance PLC, note 95 above.

166 Colinvaux's Law of Insurance, note 42 above, p 313.

167 For further discussion, see Recommendation for the Draft Bill, note 38 above, paras 6.13–6.39.

168 PEICL Art 2:101, Comment C4.

169 For a critical overview, see Heiss and Mönnich, note 28 above, pp 393–400.

170 As it was before the VVG Reform 2008.

171 MüKo 2010/Langheid, Versicherungsvertragsgesetz, § 19(2), Rdn 114–16.

172Wenn der Versicherungsnehmer die Anzeigepflicht weder vorsätzlich noch grob fahrlässig verletzt hat ’, § 19(3) VVG, MüKo 2010/Langheid, Versicherungsvertragsgesetz, § 19(2), Rdn 134–36.

173Wenn er den Vertrag auch bei Kenntnis der nicht angezeigten Umstände … wenn auch zu anderen Bedingungen, geschlossen hätten’ Ibid § 19(4) VVG.

174 MüKo 2010/Langheid, Versicherungsvertragsgesetz, § 19(2), Rdn 140–53.

175 Baumann/Sandkühler, Das Neue VVG (Haufe, 2009), pp 59–60; Langheid, MüKomm VVG, § 19 Rdn 150

176 Langheid, MüKomm VVG, § 19 Rdn 147.

177 Ibid.

178 MüKo 2010/Langheid, Versicherungsvertragsgesetz, § 19, Rdn 150.

179 Baumann/Sandkühler, note 175 above, p 60.

180 B Soyer, ‘Reforming the Assured's Pre-Contractual Duty of Utmost Good Faith in Insurance Contracts for Consumers: Are the Law Commissions on the Right Track?,’ note 118 above.

181 Cousy, note 96 above, p 123.

182 For example, Council Directive 2004/113/EC of 13 December 2004 Implementing the Principle of Equal Treatment between Women and Men in the Access to and Supply of Goods and Services [2004] OJ L373. The Directive prohibits premium segmentation based on gender, but allows member states to opt out from the application, which included most of the EU member states. Cousy, note 96 above, p 123.

183 For example, Directive 2000/43/EC Against Discrimination on Grounds of Race and Ethnic Origin; Directive 2000/78/EC Against Discrimination at Work on Grounds of Religion or Belief, Disability, Age or Sexual Orientation; Directive 2006/54/EC Equal Treatment for Men and Women in Matters of Employment and Occupation; Directive 2004/113/EC Equal Treatment for Men and Women in the Access to and Supply of Goods and Services; Directive Proposal (COM(2008)462) Against Discrimination Based on Age, Disability, Sexual Orientation and Religion or Belief beyond the Workplace.

184 Allgemeines Gleichbehandlungsgesetz, 14 August 2006 (BGBl. I S. 1897).

185 Before the Act came into force there were several pieces of legislation to cover discrimination, including: the Sex Discrimination Act 1975; the Race Relations Act 1976; and the Disability Discrimination Act 1995. For more, see https://www.gov.uk/guidance/equality-act-2010-guidance. See more, Rühl note 133 above, p 894.

186 Van Rossum, note 12 above, pp 52–55.

187 Wandt, note 9 above, p 343.

188 Zboron, note 13 above.

189 Transparency in Insurance Contract Law, note 3 above, p 5.

190 Ibid, p 6.