LIECHTENSTEIN Law and Practice Contributed by: Alexander Ospelt, Lukas-Florian Gilhofer, Vivianne Auer and Laura Bayer, Ospelt & Partner Attorneys at Law Ltd
requirements are not met, the policyholder is not bound by the application and can cancel the contract within four weeks of receiving the insurance policy and information on the right of cancellation. In return, the applicant must inform the insurer in writing, by means of a questionnaire or other written request, of all facts relevant to the assessment of the risk insofar as they are known or become known to them at the time of the conclusionof the contract. The insured party must not intentionally or negligently con- ceal material facts about the risk (breach of the duty of disclosure) when concluding the contract. If it does so, the insurance company may demand adjustment of the contract or cancel it within four weeks of dis- covery of the breach. If the insured event has already occurred, the liability does not apply if the event is attributable to the concealed or misrepresented risk. 6.2 Failure to Comply With Obligations of an Insurance Contract The insurance company has a duty to provide infor- mation in accordance with Article 3 of the Insurance Contract Act (VersVG). The general and special insur- ance conditions and the necessary information must either be included in the insurance contract or made available to the applicant in another way before the insurance application is submitted. Article 3 para- graph 2 of the VersVG provides that, if this require- ment is not met, the applicant is not bound by the application. After conclusion of the contract, the poli- cyholder may withdraw from the contract if the duty to provide information has been violated. The right of withdrawal expires at the latest four weeks after receipt of the policy, with information on the right of withdrawal included. Article 65 of the VersVG provides a second right of withdrawal in the life insurance sec- tor. To fulfil its legal obligation, the insurer is required to carry out notification on both rights of withdrawal. In return, the applicant must inform the insurer in writing, by means of a questionnaire or other writ- ten request, of all facts relevant to the assessment of the risk insofar as they are known or become known to them at the time of the conclusionof the contract. According to Article 6 to 8 of VersVG, the insured party must not intentionally or negligently conceal material facts about the risk (breach of the duty of disclosure)
when concluding the contract. If it does so, the insur- ance company may demand adjustment of the con- tract or cancel it within four weeks of discovery of the breach. If the insured event has already occurred, the liability does not apply if the event is attributable to the concealed or misrepresented risk. 6.3 Intermediary Involvement in an Insurance Contract Insurance intermediaries are subject to supervision by the FMA and require its approval before engaging in insurance distribution. They must conduct business according to the provisions of the Insurance Distri- bution Act (VersVertG). Insurance intermediaries are required to provide their customers with the informa- tion set forth in Article 37 (2) of the VersVertG. Intermediaries must disclose to the customer whether they work exclusively for certain insurers (only sell- ing their products), which would them make agents, or whether they conduct a “balanced and personal investigation” of the market as an independent inter- mediary, making them brokers. 6.4 Legal Requirements and Distinguishing Features of an Insurance Contract An insurance contract is a legally binding continuing obligation contract between the insurer and the poli- cyholder in which the insurer undertakes to provide financial protection against various risks (the risk of an uncertain event occurring) in return for the pay- ment of premiums. Accordingly, the essential feature of an insurance contract from a civil and regulatory perspective is the assumption of a risk by the insurer. The insurance contract typically outlines the terms and conditions of the insurance coverage, including its scope, duration and the amount of the premiums. The insurer is obliged to provide the policyholder with a contract document (the policy or, in the case of a contract amendment, an addendum), which sets out the rights and obligations of the parties. It must also provide the policyholder, at their request, with a copy of the declarations contained in the application docu- ments or otherwise made by the applicant and on the basis of which the insurance contract was concluded.
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