Article: O.-J. Luik, T. Kontautas, "Does the insurance premium payment regulation as stipulated in the Principles of European Insurance Contract Law protect policyholders sufficiently enough?", Verslo ir teisės aktualijos / Current Issues of Business and Law 2012 (7) 1, pp. 85–107. DOI: 10.5200/1822-9530.2012.06 · Lituanistika record (published 2012)
Co-author: Tomas Kontautas.
Research question
Do the premium payment rules in the Principles of European Insurance Contract Law (PEICL) protect policyholders sufficiently?
Main arguments
The premium is the price of risk (pretium periculi) and the policyholder's main obligation. Non-payment may in some cases release the insurer from performance. Member State rules differ significantly, which complicates cross-border services and makes obligations hard to understand for people moving to work in another country. The article compares the Estonian Law of Obligations Act, the Latvian Insurance Contract Law and the Lithuanian Civil Code and Insurance Law with PEICL. The authors conclude that PEICL is to some extent more favourable to consumers than Baltic law, and that Finnish law is even more consumer-friendly on premium issues.
Relevance for insurers
In Estonia the consequences of non-payment are still governed by Law of Obligations Act (võlaõigusseadus, VÕS) § 457 (first premium) and § 458 (subsequent premiums). For a late subsequent premium the insurer may set, in a form reproducible in writing, an additional period of at least two weeks, or at least one month for insurance of a building, and must state the legal consequences of its expiry; release from the obligation to perform and termination presuppose such a period (VÕS § 458(1)–(3)).