Article (in Russian): M. Kratenko, O.-J. Luik, "Insurance Exclusions Contrary to the Requirement of Fair Business Practice: Perspectives for Protection of Policyholder's Rights in Russia and Estonia as a Member of the European Union", Journal of Foreign Legislation and Comparative Law 2019/6, pp. 34–50. DOI: 10.12737/jflcl.2019.6.3 (published 2019). English summary: WIDEN.
Co-author: Maksim Kratenko.
Research question
Are exclusions of cover fair to policyholders, and how does the legal order protect policyholders against unfair exclusions?
Main arguments
The authors divide exclusions into objective risk exclusions, which apply regardless of the policyholder's conduct, and exclusions triggered by breach of a contractual duty. Estonian law offers layered protection: review of standard terms, the insurer's pre-contractual information duty and interpretation of unclear terms against the drafter, and courts often side with policyholders. In the other jurisdiction compared, courts emphasise freedom of contract. The authors recommend individual negotiation of non-statutory exclusions, a list of presumptively unfair terms, a clear distinction between objective-risk and conduct-based exclusions, and a standardised product information document.
Relevance for insurers
Estonian Supreme Court practice has since confirmed the distinction: before assessing a term, one must establish whether it excludes a risk or in substance regulates a duty of care, to which the proportionality logic of Law of Obligations Act (võlaõigusseadus, VÕS) § 452(2) applies. Wording that labels a behavioural requirement as an "exclusion" does not escape that test.