SWEDEN Law and Practice Contributed by: Viveka Classon, Karin Rättzén and Sara Stålebring, Advokatfirman Vinge KB
The general rules of the IDD are implemented in Swe- den through the IDA in a manner consistent with the directive, including the general exemptions for large risks and reinsurance. There are, however, some areas where the Swedish legislator and the Swedish FSA have exercised the possibility of implementing stricter requirements than those set out in the IDD (“gold-plating”). Such gold-plated provisions include, for example, requirements regarding knowledge and competence for employees, professional indemnity insurance, internal policies and procedures, and complaints handling. In addition, certain provisions regarding remuneration are stricter than those set out in the IDD. Further, the IDA places strong emphasis on conflict-of-interest matters arising from remuneration received from third parties. For instance, insurance intermediaries that provide advice based on a fair and personal analysis are prohibited from accepting and retaining remuneration from any other person than the customer. Types of Insurance Distributors Active on the Swedish Market Insurance is distributed through the following chan- nels in Sweden: • direct sales by insurance companies; • agents or tied insurance intermediaries; • brokers and authorised insurance intermediaries which are not contractually obligated to distribute insurance exclusively on behalf of one or more insurance undertakings; and • bancassurance and other channels. 6. Making an Insurance Contract 6.1 Obligations of the Insured and Insurer The ICA applies irrespective of whether the terms of the insurance contract have been subject to negotia- tion or not. The Insured Party’s Obligations According to the ICA, a policyholder who acquires, extends, or renews an insurance policy has an obli- gation to provide information which may affect the undertaking’s decision to issue the insurance, upon the request of the insurance undertaking. The policy-
holder has an obligation to provide true and complete answers to the insurance undertaking’s questions. This obligation continues throughout the entire insur- ance period. For non-consumer insurances, the policyholder must, without inquiry by the insurance undertaking, also pro- vide information that is clearly significant for the risk assessment. The insurer may also provide in the contract terms and conditions that the policyholder will report to the company any change in circumstance specified in the contract and which is of material significance in respect of the risk. If the policyholder fails to inform or notify the under- taking, the insurance compensation may be reduced. The reduction is based on, inter alia, the significance which the fact would have had for the insurance undertaking’s risk assessment and whether the dis- regard was intentional or negligent. If the policyholder has acted fraudulently or in bad faith in fulfilling the obligation to inform the insurer, the contract is void. This applies to both consumer insurance and com- mercial insurance. The Insurer’s Obligations The ICA contains provisions obligating the insurance undertaking to inform the policyholder prior to issu- ance when the contract has been executed and in conjunction with renewal of the insurance policy. The insurance undertaking must, prior to the issuance of any insurance, provide information which facilitates the customer’s assessment of the need for, and choice of, such insurance. Important limitations to the insur- ance must be set forth clearly. Immediately after the contract is executed, the insurance undertaking will provide the policyholder with written confirmation, and advise the policyholder of the terms and conditions of the insurance policy. During the insurance period and at the time of renewal, the insurance undertaking must inform the policyholder of any circumstances that are of concern. If the insurance undertaking makes cer- tain amendments to the insurance policy, it must also inform the insured party of such amendments.
433 CHAMBERS.COM
Powered by FlippingBook