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Transparency in Insurance Contract Law pp 95–129Cite as

Transparency in the Insurance Contract Law of Greece

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Part of the book series: AIDA Europe Research Series on Insurance Law and Regulation ((ERSILR,volume 2))

Abstract

The macro-economic condition in Greece has been one continuing financial (public debt) crisis since 2008, which has also adversely affected the private sector of the economy and most particularly credit institutions. The average GDP per capita has substantially decreased by about 14% since 2007; it was about US$32,000 in 2007 and had fallen to about US$28,580 in 2018. This is reflected in the insurance market as well, as the total revenue from premiums and the average insurance premium per capita are steadily decreasing during the past years.

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Notes

  1. 1.

    The information provided in this chapter is derived from the Annual Report for 2018 of the Hellenic Association of Insurance Companies.

  2. 2.

    For a discussion of the impact of customer centricity and transparency in the Dutch healthcare insurance market see Looijenga (2016) (available at http://edepot.wur.nl/395221).

  3. 3.

    For a concise description of Greek Insurance Law, see Chrissanthis and Chardalia (2017) (available online at: https://iclg.com/practice-areas/insurance-and-reinsurance/insurance-and-reinsurance-2017/greece).

  4. 4.

    Guidance relating to the transparency provisions of the Directive can be found in CEIOPS (Committee of European Insurance and Occupational Pensions Supervisors) Consultation Paper No. 34, Transparency and Accountability, (CEIOPS-CP-34/09), 26.03.2009.

  5. 5.

    For a concise discussion of the Solvency II Directive 2009/138 EU see Smith (2010), p. 357. For a comparison of how solvency requirements are applied in the US and the EU see Siegel (2013), pp. 308–331 (www.genevaassociation.org).

  6. 6.

    Carnell et al. (2008).

  7. 7.

    Dong (2014) (available at: https://www.econstor.eu/handle/10419/100664).

  8. 8.

    Lin and Yang (2013), pp. 2184–2187.

  9. 9.

    Nat’l Sci. & Tech. Council, Smart disclosure and consumer decision making: Report of the Task Force on Smart Disclosure, 2013 (7), available at www.whitehouse.gov/sies/default/files/microsites/ostp/report_of_the_task_force_on_smart_disclosure.pdf.

  10. 10.

    For a similar assessment in the securities market see La Port et al. (1999), pp. 471 seqq.; La Port et al. (2003).

  11. 11.

    Schwarcz (2010), p. 1707.

  12. 12.

    Schwarcz (2014), pp. 394 and 414 (also available at http://scholarship.law.umn.edu/faculty_articles/572).

  13. 13.

    This approach seems to be supported by the Solvency II Directive 2009/138. For example Recitals 14 and 16, 17, 43, 60, 68 specifically mention that the purpose of regulation is to protect the contractual counter-party. Moreover, Art. 27 of the Directive explicitly provides that the purpose of regulation is the protection of the contractual counter-parties and the insureds.

  14. 14.

    For a discussion of the adverse effects of inadequate product transparency in the Italian insurance market see Galli (2005), pp. 443–450 (available at www.palgrave-journals.com/gpp).

  15. 15.

    Kennedy et al. (2012), p. 1141.

  16. 16.

    Healy and Palepu (2001), pp. 405–440.

  17. 17.

    Lang and Lundholm (1996), pp. 467–492.

  18. 18.

    Fung et al. (2008).

  19. 19.

    Vander Bauwhede and Willekens (2008), pp. 101–115.

  20. 20.

    Guidance relating to the transparency provisions of the Directive can be found in CEIOPS (Committee of European Insurance and Occupational Pensions Supervisors) Consultation Paper No. 34, Transparency and Accountability, (CEIOPS-CP-34/09), 26.03.2009.

  21. 21.

    The Directive has been supplemented by secondary EU legislation, in particular Regulation 2015/35 EU.

  22. 22.

    The European Insurance and Occupational Pensions Authority (EIOPA) has issued secondary regulation with specific standards that the Solvency and Financial Condition Repost must meet (EIOPA-BoS-15-109/14.09.2015); this EIOPA regulation has been implemented into Greek law by virtue of a Regulatory Act of the Executive Committee of the Central Bank of Greece, No. 77/12.02.2016.

  23. 23.

    CEIOPS Consultation Paper 58.

  24. 24.

    CEIOPS Consultation Paper 58, par. 3.243.

  25. 25.

    For the peculiarities of the insurance industry to the average consumer see Lualdi (2005), pp. 467–476 (available at www.palgrave-journals.com/gpp).

  26. 26.

    The Recitals of Directive 93/13 EEC on unfair terms in consumer contracts provide: “Whereas, for the purposes of this Directive, assessment of unfair character shall not be made of terms which describe the main subject matter of the contract nor the quality/price ratio of the goods or services supplied; whereas the main subject matter of the contract and the price/quality ratio may nevertheless be taken into account in assessing the fairness of other terms; whereas it follows, inter alia, that in insurance contracts, the terms which clearly define or circumscribe the insured risk and the insurer’s liability shall not be subject to such assessment since these restrictions are taken into account in calculating the premium paid by the consumer”.

  27. 27.

    CJEU, 23.04.2015, C-96/14, Van Hove v. CNP Assurances.

  28. 28.

    Art. 2(8) of Law 2496/1997 was recently discussed in the Judgments 18 and 19/2015 of the Greek Supreme (Cassation) Court (Areios Pagos) in Plenary Session.

  29. 29.

    The last amendment of Law 2251/1994 was by Law 3587/2007. This law deals with several aspects of consumer protection such as unfair contract terms, distance sales, sales outside business premises, product liability, unfair business practices, such as unfair or deceptive advertising, etc. and implements the respective EU Directives on all these matters. Law 2251/1994 also implements into Greek law Directive 1993/13 EEC on unfair contract terms.

  30. 30.

    The legal provisions of Greek law on contract construction are Articles 177, 200 of the Greek Civil Code. These provisions apply to the interpretation of insurance policies as well.

  31. 31.

    On the construction of insurance policy terms see the Judgments of the Greek Supreme (Cassation) Court (Areios Pagos) 1285/1987, reported in Digest of Greek Lawyers (Efimeris Ellinon Nomikon) 1988, p. 677 and 211/2012, reported in Legal Herald (Nomiko Vima) 2012, p. 1954.

  32. 32.

    Judgment 1030/2001 of the Greek Supreme (Cassation) Court (Areios Pagos), reported in Commercial Law Review (Epitheorisi Emporikou Dikaiou) 2001, p. 740. Judgment 1407/2002 of the Appeal Court of Athens, reported in Commercial Law Review (Epitheorisi Emporikou Dikaiou) 2004, p. 553. See also Rokas (2013), p. 517.

  33. 33.

    Supreme (Cassation) Court (Areios Pagos), Judgment 11/2006, reported in Commercial Law Review (Epitheorisi Emporikou Dikaiou) 2006, p. 380. It is worth noting that Art. 19(1) of Greek Law 2496/1997 expressly provides that a fire policy provides cover against risks due to fire and lightning.

  34. 34.

    Supreme (Cassation) Court (Areios Pagos), Judgment 1597/2011, unreported.

  35. 35.

    Athens Court of Appeals, Judgment 2386/2006, reported in Greek Justice (Elliniki Dikaiosini) 2006, p. 1461. This case related to an accident during a flight with an aircraft of the Greek Military Air Force for non-military purposes. An aircraft of the Greek Military Air Force was crashed while it was used for the transportation of governmental officers and other person with non-governmental position in an official ceremony. The issue for the court to decide was whether the accident was covered under a life and accidents policy.

  36. 36.

    Appeal Court of Athens, Judgment 6120/2003, reported in Commercial & Company Law Review (Dikaio Epicheiriseon kai Etairion) 2004, p. 682.

  37. 37.

    Supreme (Cassation) Court (Areios Pagos), Judgment 1308/2007, reported in Commercial & Company Law Review (Dikaio Epicheiriseon kai Etairion) 2008, p. 71.

  38. 38.

    Supreme (Cassation) Court (Areios Pagos), Judgment 846/2003, reported in Commercial Law Review (Epitheorisi Emporikou Dikaiou) 2003, p. 839.

  39. 39.

    Supreme (Cassation) Court (Areios Pagos), Judgment 1987/2006, reported in Commercial Law Review (Epitheorisi Emporikou Dikaiou) 2008, p. 105.

  40. 40.

    Athens Court of Appeals, Judgment 2894/2008, reported in Commercial Law Review (Epitheorisi Emporikou Dikaiou) 2009, p. 831.

  41. 41.

    Supreme (Cassation) Court (Areios Pagos), Judgment 1679/2008, reported in Legal Herald (Nomiko Vima) 2009, p. 388. The court was influenced by the fact that the premium was evidently very small. On this ground the court reasoned that the purpose of the policy was not to ordinary cover risks occurring during the usual and daily transportation of the insured persons. However, this is a judgment that received criticism and may be regarded controversial.

  42. 42.

    Supreme (Cassation) Court (Areios Pagos), in Plenary Session, Judgments 18 and 19/2015.

  43. 43.

    This reasoning of the court is (with respect) again mistaken, as discussed earlier above.

  44. 44.

    Schwarcz (2014), pp. 394 and 414 (available at: http://scholarship.law.umn.edu/faculty_articles/572).

  45. 45.

    In connection to legal issues relating to the role of intermediaries in insurance see Marano (2010), p. 23; Cerini (2010), p. 159; Chrissanthis (2010a), p. 49; Chrissanthis (2010b), p. 9.

  46. 46.

    Directive 2002/92 EC, Art. 12 par. 1 and 4.

  47. 47.

    Regulatory Act No. 86/05.04.2016 of the Executive Committee of the Central Bank of Greece. The Act is titled “Code of Conduct of (Re)Insurance Intermediaries”, but it establishes statutory duties.

  48. 48.

    Art. 31(4) of Directive 2016/97 EU on insurance distribution contains a provision to the same effect.

  49. 49.

    The Financial Conduct Authority of the UK has issued useful practical guidance on the implementation and the interpretation of Directive 2016/97 in its Consultation Paper I (No. 17/7). This guidance is of international interest and is not unique to UK only.

  50. 50.

    See recital 3 of Directive 2016/97.

  51. 51.

    The implementation of Directive 2016/97 EU received little attention in Greek legal literature; see Rokas (2019a); Rokas (2019b), p. 3; Varouchaki (2016), p. 1; Karamanakou (2017), p. 772.

  52. 52.

    In particular the more important regulatory provisions are contained in Regulatory Act No. 86/05.04.2016 of the Executive Committee of the Central Bank of Greece. The Act is titled “Code of Conduct of (Re)Insurance Intermediaries” and establishes statutory duties for intermediaries. The provisions of the Act are based on Directive 2016/97, although the Act itself came into force before law 4583/2018 which implemented the Directive.

  53. 53.

    Useful guidance in relation to the risks associated with types of remuneration and incentive schemes can be found in the document issued by the UK Financial Services Authority titled Final Guidance, Risks to customers from financial services, January 2013.

  54. 54.

    In 2012 in the US the Dodd – Frank Act prohibited similar arrangements in connection to intermediaries’ remuneration in the mortgage lending market.

  55. 55.

    The requirements of Art. 20 of the Directive regarding product specific information in summary form have been further refined by the Implementing Regulation 2017/1467 EU on the standardized presentation format for the insurance product information document.

  56. 56.

    EIOPA, IPID Consumer testing and design work, Final Report, EIOPA/OP/153/2015, July 2016.

  57. 57.

    EIOPA Consultation Paper on the proposal for implementing technical standards on a standardized presentation format of the IPID, EIOPA-CP-16/007, 01.08.2016.

  58. 58.

    EIOPA, Preparatory guidelines on product oversight and governance arrangements, 18.03.2016, EIOPA-BoS-16-071.

  59. 59.

    EU Commission, 2013/C 167/07, C 167, 13.06.2013, 19.

  60. 60.

    EU Commission, SWD (2013) 205, 11.06.2013, C 2013, 3440.

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Acknowledgements

The author wishes to thank Miss Xenia Chardalia, LL.B., LL.M., LL.M. for her valuable legal insight and ideas in discussing the issues raised in this chapter.

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  1. University of Athens, Athens, Greece

    Christos S. Chrissanthis

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  1. Department of Legal Studies, Catholic University of the Sacred Heart, Milano, Italy

    Pierpaolo Marano

  2. School of Law, University of Exeter, Exeter, UK

    Kyriaki Noussia

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Chrissanthis, C.S. (2019). Transparency in the Insurance Contract Law of Greece. In: Marano, P., Noussia, K. (eds) Transparency in Insurance Contract Law. AIDA Europe Research Series on Insurance Law and Regulation, vol 2. Springer, Cham. https://doi.org/10.1007/978-3-030-31198-8_4

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