Constitutional Court Ruling no. 16/2024 of 25 January 2024 on Article 88, § 1, 2nd sentence of the Insurance Act (docket no.: 8051)

In a reference for a preliminary ruling submitted by the Brussels Court of Appeal in connection with a dispute relating to an employer’s supplementary pension commitment in the form of a group insurance scheme, administered by an insurer, the Constitutional Court was asked to compare the 30-year statute of limitations applicable to legal claims relating to vested reserves of life insurance policies as laid down in Article 88, § 1, 2nd sentence of the Insurance Act of 4 April 2014 with the common law limitation periods in Articles 2262 and 2262bis of the old Civil Code – in particular as these apply to legal actions against institutions for occupational retirement provision and savings products offered by banks (both subject to the 10-year limitation period for personal contractual claims in Article 2262bis, § 1, of the old Civil Code), whereas in common law the 30-year limitation period under Article 2262 of the old Civil Code, as amended by the law of 10 June 1998, applies only to actions involving property rights (in rem). The Court proceeded to examine whether or not said provision of the Insurance Act conflicts with the principles of equality and non-discrimination, entailing a violation of Articles 10 and 11 of the Constitution.

The fact that this 30-year limitation period still exists in the Insurance Act might be due purely to an oversight: as supported by some legal doctrine, the legislator seemingly intended to align the limitation period for legal claims concerning the vested reserves of life insurance policies with that applicable to savings transactions in the banking sector, which was previously the common law limitation period for personal and property claims as stipulated in Article 2262 Civil Code, before its amendment by the law of 10 June 1998, which reduced the limitation period for personal, contractual claims to 10 years through the introduction of Article 2262bis. Art. 88 of the Insurance Act, however, does not refer to the Civil Code but explicitly mentions a 30-year limitation period, and was never amended. As the Court upheld in an earlier ruling of 22 October 2020, such a lengthy statute of limitations is to be considered as a specific provision aimed at striking a balance between the diverse interests involved. As it applies exclusively to the vested reserves of life insurance policies, which inherently have a long duration and are of great financial consequence, it cannot be considered to run contrary to legal certainty and the proper administration of justice. The Court therefore rules that this provision of the Insurance Act does not entail a disproportionate restriction of the rights of insurance undertakings and does not constitute a violation of the Constitution.

Read the full text of the ruling at https://www.const-court.be/public/n/2024/2024-016n.pdf (Dutch) or https://www.const-court.be/public/f/2024/2024-016f.pdf (French).

Questions? Please contact our Insurance expert, Sandra Lodewijckx (sandra.lodewijckx@lydian.be).