AUSTRIA Law and Practice Contributed by: Philipp Scheuba, BLS Rechtsanwälte GmbH
the insurance intermediary has to evaluate the cus- tomer’s wishes and needs on the basis of information provided by the customer. Intermediaries also have to draw up a consultation protocol for the entire consul- tation process. Furthermore, the will of the contract- ing parties can often be identified on the basis of the advertising materials used in the advisory process. If it is not possible to ascertain a concurring will of the parties, the contractual declarations are to be inter- preted – in accordance with the provisions of general civil law – on the basis of good faith and customary commercial practice. In this case, it depends on how a bona fide recipient of the declaration would have understood the contractual declaration in question. If there are still unclear issues after the interpreta- tion of a contract, the contract has to be interpreted to the detriment of the person who formulated the unclear declaration. This is especially relevant in the context of the interpretation of insurance contracts, as it is generally not possible to clearly determine a party’s will regarding individual terms on the basis of the interpretation possibilities described above. Insur- ance contracts are therefore usually interpreted at the insurer’s expense if they are unclear. 8.2 Warranties Warranties are basically already stipulated by the Insurance Contract Act as well as the Austrian Civ- il Code. However, insurance contracts also often include a corresponding clause. If such clauses are specifically stated in the insurance contract, they are usually described as notification obligations. If a policyholder culpably fails to report a significant circumstance as pointed out in 6.2 Failure to Comply with Obligations of an Insurance Contract , the insur - er may withdraw from the contract. After the insurance contract has been concluded, the policyholder has to inform the insurer about any increased risk. The increase of such risk is only subsequently included in the insurance contract if the insurer agrees. If the policyholder, after conclusion of the contract, does not disclose any increased risk, the insurer has the right to withdraw from the contract without observ- ing a notice period. If the policyholder is not at fault, the policyholder must accept notice of termination
only after the expiry of one month. The right of notice shall expire after one month from the time at which the insurer becomes aware of the increased risk, or if the situation that existed before the increased risk is recovered. In the event of a breach of the agreed contractual obligations, the insurance conditions usually stipulate the insurer’s discharge from liability. In this respect, it is essential for the policyholder to be aware of the obligations that apply to them and to fulfil such obli- gations in the event of a claim. However, the insurer’s discharge from liability does not apply if the policy- holder is not at fault for the breach of the obligation. 8.3 Conditions Precedent Austrian insurance law recognises conditions prec- edent as well as conditions subsequent. Conditions precedent do not have to be explicitly named as such, but should be described as clearly as possible, as contracts containing conditions prec- edent only become effective if the stated condition is fulfilled. If the condition subsequently occurs, that event will terminate one party’s obligation to the other. 9. Insurance Disputes 9.1 Insurance Disputes Over Coverage Insurance contract disputes are subject to general civil jurisdiction unless they are social insurance claims. Since insurance companies are operating in the form of a joint stock company or a European joint stock company, the civil courts, as district or regional courts in commercial matters, usually have jurisdic- tion in the event of an action filed by the policyholder against the insurer for the contractually owed insur- ance coverage. Disputes under EUR15,000 fall under the jurisdiction of the district courts, whereas regional courts are competent for disputes above the amount of EUR15,000. Alternatively, special arbitration courts can be consulted. This applies to disputes over cover- age in consumer contracts and reinsurance contracts. The limitation period starting after the insured risk occurred is three years. Any insured person applying for coverage has to submit a declaration of damage,
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