Interpretation of the Life Assurance Directive on the insurer’s duty to issue additional information

The insurance company and the holder of a life assurance policy were disputing whether the insurance company had provided sufficient information about the costs and risk premiums before the policy was entered into. The policyholder complained that they had not been given a summary or full overview of the actual and/or absolute costs and their composition. The Dutch court believed that the insurer had breached the general principles of national law, duty of care, pre-contractual good faith and requirements of reasonableness and fairness as a result of its conduct. Against this background, the court referred the question to the ECJ whether Art. 31(3) of Directive 92/96/EEC (third life assurance directive) conflicts with life insurers having to furnish more information to policyholders on costs and premiums than is listed under Annex II(B) to the Directive under “open and/or unwritten rules of Dutch law”.

In its decision, the ECJ referred to the 23rd recital in the third life assurance directive and inferred from it that the purpose of the Directive was to coordinate minimum provisions so that consumers receive clear and accurate information on the products being offered to them. It said that this was why the Directive provided that at least the information listed in Annex II(B) of the Directive has to be reported. It continued that Art. 31(3) of the Directive provides that insurers be only be requested to provide additional information if this information is necessary in order to be able to properly understand the essential elements of the insurance policy. Thus the ECJ said that it was in principle possible to bind insurers to provide additional information based on general principles of national law.

However, in the ECJ’s opinion, the additional information must be necessary in order to inform the policyholder and accurate and clear enough to achieve this aim. Apart from this, the legal basis on which the Member State concerned would like to make use of its power under Art. 31(3) must be structured in such a way that it is possible for insurers to identify with sufficient foreseeability the additional information they have to provide to the policyholder and which the policyholder may expect. Otherwise, a sufficient level of legal certainty would not be guaranteed, it pointed out.

The court continued that it was for the national courts to determine whether the information requested was clear, accurate and necessary for the policyholder to be able to properly understand the insurance terms and conditions and whether it offered sufficient legal certainty. In relation to legal certainty, it also had to be taken into account that the insurer determines the nature and characteristics of the products it offers and therefore fundamentally has to be in a position to recognise the characteristics of the products making it necessary to furnish additional information to the policyholder.