Draft law on terms and sanctions regarding the payout of insurance benefits

A draft law tabled by the federal government, aiming to introduce general terms and sanctions in relation to the payout of insurance benefits, was submitted last 21 December to the Chamber of Representatives. The legislative change is motivated by the fact that currently, deadlines for the compensation of damages are only provided for specific branches of insurance. From a consumer protection perspective, an overall legal framework for the settlement of claims would be preferable. The branches for which payment terms for the granting of insurance benefits are already closely regulated currently consist of: motor third-party liability insurance aka MTPL (Articles 13 and 14 of the law of 21 November 1989), fire insurance (Article 121 of the Insurance Act of 4 April 2014, coupled with Article 9 of the Royal Decree of 24 December 1992 on insurance against fire and other hazards, in respect of ordinary risks), life insurance (Artt. 197/1 and 197/2 of the Insurance Act) and supplementary pensions (2nd pillar). For other branches, no specific provisions as yet exist.

The legislative proposal was developed on the basis of three main axes:

• liability insurance (e.g. private civil liability, objective liability insurance for fire and explosion in establishments accessible to the public): an extension of the rules applicable to MTPL insurance;
• property insurance (e.g. car or theft insurance): an extension of the rules applicable to fire insurance;
• other insurance (e.g. health insurance and accident insurance - excluding occupational accident insurance, which is regulated by specific legal provisions): introduction of a general provision, inspired by the Luxembourg Act of 27 July 1997 on insurance contracts, stipulating that the insurance undertaking will issue the agreed insurance benefits as soon as all the necessary elements are at its disposal, and at the latest within 30 days from that date.

This latter category is the residual category of insurance policies that consist of neither liability nor property insurance and which do not already form the subject of specific legal provisions. In addition, the draft law provides for the adaptation of Article 121 of the Insurance Act of 2014 so as to ensure consistency between said article and the regime provided in this draft law for property insurance.

The proposal does not aim to amend Articles 13 and 14 of the MTPL Act of 21 November 1989, as this will be covered by a separate bill (not yet available for consultation).

On request of Minister Dermagne, the Insurance Commission had already issued a detailed opinion in December 2022, which is attached to the federal government’s bill. To consult these documents, see https://www.dekamer.be/kvvcr/showpage.cfm?section=/none&leftmenu=no&language=nl&cfm=/site/wwwcfm/flwb/flwbn.cfm?lang=N&legislat=55&dossierID=3749.

Questions? Please feel free to reach out to our Insurance expert, Sandra Lodewijckx (sandra.lodewijckx@lydian.be).