Insurance in Private International Law

Transcription

1 Insurance in Private International Law A European Perspective FRANCESCO SEATZU HART- PUBIISHING OXFORD - PORTLAND OREGON 2003

2 Table ofcases Table of Abbreviations xxvii xxix Part I. The Substantive Law Background in Europe and its Signifìcance for Private International Law 1. The substantive law in Europe 3 1. Introduction 3 2. The EU Insurance Market 3 3. The Treaty of Rome 4 (a) Establishment 5 (b) The Freedom of Services 6 (e) Establishment v Services 7 (d) Harmonisation 7 4. The 1993 Unfair Contract Terms Directive 8 5. Reinsurance 9 6. The First Non-Life Insurance Directive 9 (a) Scope 9 (b) Authorisation Requirements 10 (e) The Defìnition of Establishment The First Life Insurance Directive 10 (a) Scope 10 (b) Authorisation Requirements 11 (e) The Simultaneous Operation of Life and Non-life Insurance The Co-insurance Directive 11 (a) Scope 11 (b) The Co-insurance Directive and thè Insurance Cases The Second Non-Life Insurance Directive 12 (a) Scope 12 (b) Large Risks and Mass Risks 12 (e) Member State where thè Risk is Situated 13 (d) Supervisory Systems The Second Life Insurance Directive 14 (a) Scope 14 (b) Policyholders Insurance Companies from Third Countries The Third 'Generation' Insurance Directives 15

3 xiv 13. The Third Non Life Insurance Directive 16 (a) Scope 16 (b) The Single Authorisation System 16 (e) The extension of Home Member State Control The Third Life Insurance Directive 17 (a) Scope 17 (b) The Single Authorisation System 17 (e) The Extension of Home Member State Control The 'General Good' in thè Third Insurance Directives The European Substantive Law for Insurance Intermediaries Are thè EC Directives Pro-insureds? The Signifìcance of thè Substantive Law Background for Private International Law Identifying thè Problems 21 (a) What Sort of Jurisdictional Problems Are There Going to be in Europe? 21 (b) Where Are There Going to be Choice of Law Problems in Europe? 22 (e) The Interaction of European Union Law and Conflict of Law: thè Disappearance of Potential Applicable Law Problems 23 (d) Conclusion General Remarks on Insurance Conflict of Laws The Major Importance of Choice of Law Questions in Insurance Law Policy Considerations: What Has to be Achieved by Private International Law Rules in thè Fields of Insurance and Reinsurance? 28 (a) Providing a Range of Comparable Offers to Prospective Insureds 28 (b) Ensuring Compatibility with thè Substantive Law of Insurance 29 (e) Preventing Insurers from Achieving Unreasonable Competitive Advantages 30 (d) Empowering Insurers to Form Risk Pools Comprising Inhabitants of Different Member States of thè European Union 31 (e) Allowing Parties to Predict thè Law Applicable to their Legai Relationship 31 (f) Protecting thè Interest of thè Parties in Continuity of Cover Policy Issues: thè Connecting Factors 33 (a) Introductory remarks 33

4 xv (b) An Exposition of Certain Connecting Factors of Relevance in Insurance and Reinsurance Contexts Specifìc Features of Conflicts Rules in International Insurance Law Admission of Insurance and Reinsurance Services and Products to thè EU Market Conflict of Laws Issues Introduction Admission of Insurance and Reinsurance Services and Products Communication Other Issues Liability The Impact of New Technologies on thè Admission of Insurance and Reinsurance Products to thè EC Insurance Market 41 (a) Disintermediation 42 (b) Delocalisation of Insurance and Reinsurance Markets Final Remarks 43 Part II. Jurisdictional Recognition and Enforcement of Judgments Problems and Possible Solutions Section I. Jurisdictional Problems and Possible Solutions: Preliminary Observations The special rules of thè Brussels Reguladon and Lugano Convention for insurance and reinsurance disputes Which Set of Rules will Apply in Insurance Cases? 49 (a) The Availability of a Defendant Domiciled in Europe 50 (b) Multi-defendant Cases Jurisdiction under thè Brussels and Lugano Conventions 51 (a) The Set of Special Rules for Insurance Matters 51 (b) Jurisdiction in Matters Relating to Insurance 52 (e) Actions Against Insurer: Artide 9(1) 57 (d) Actions Against Insurer: Artide 9(2) 58 (e) Actions Against Insurer in Matters Relating to Liability Insurance or Insurance of Immovable Property 59 (f) Third Party Proceedings against Insurers 60 (g) Action by Insurers The Objectives of thè Special Rules for Jurisdiction Agreements in Insurance and Reinsurance Matters 52 (a) The Requirements for Jurisdiction Agreements 53

5 xvi Contenti Section II. Cross-border Co-operation Regarding Litigation in Insurance and Reinsurance Matters: Preliminary Observations Recognition and Enforcement of Judgments in Insurance and Reinsurance Matters When will thè Brussels Regulation and Lugano Convention apply? 71 (a) The Brussels Regulation 71 (b) The Lugano Convention The Scope of thè Brussels Regulation 72 (a) A Judgment Given in a Member State 72 (b) The Type of Jurisdiction Provision is Irrelevant 72 (e) The Judgment is Given in Respect of a Civil and Commerciai Issue Recognition of thè Foreign Judgment 73 (a) An Indispensable First Stage 73 (b) The Rebuttable Presumption in Favour of Recognition How Problems Arise in Insurance and Reinsurance Cases 75 (a) Recognition and Enforcement by EU National Courts of Judgments Rendered by other EU National Courts 75 (b) Recognition and Enforcement by EU National Courts of Judgments Rendered by Courts of a Non-Member State Against thè UK Defendant Forum shopping Introduction Reasons to Forum Shop Forum Shopping Within thè European Community in Insurance Cases 80 (a) What Advantages Will a Claimant Obtain? 80 (b) The Opportunity to Forum Shop 83 (e) Is there Anything Wrong with Forum Shopping within Europe? 84 (d) How Can thè Insured/Claimant be Discouraged from Forum Shopping? 84 Part III. The Law Applicable to Insurance and Reinsurance Contracts under thè 1980 Rome Convention and thè EC Insurance Directives 8. The 1980 Rome Convention and thè Law Applicable to Insurance and Reinsurance Contracts Which Set of Rules will Apply to Insurance and Reinsurance Contracts? 91

6 xvii 2. The Definition of 'Risk' in thè Rome Convention Law Applicable to thè Insurance Policy The Express Choice of thè Law Applicable to Insurance and Reinsurance Contracts Does thè Lex Mercatoria Apply to Reinsurance Contracts and Insurance Contracts Covering Risks Situated Outside thè Territories of thè Member States of thè European Community? 97 (a) The Notion of Lex Mercatoria 97 (b) The Applicability of Lex Mercatoria Dépecage of Insurance and Reinsurance Contracts The Law Applicable to Insurance and Reinsurance Contracts in thè Absence of an Express Choice The Law Applicable to Insurance and Reinsurance Contracts in thè Absence of Choice The Characteristic Performance of Insurance and Reinsurance Contracts The Rome Convention and thè Law Applicable to Co-insurance Contracts The Law Applicable to Insurance Contracts Concluded by Consumers The Law Applicable to Multiple Risks Policies EvasionofLaw The Application of Mandatory Rules to Insurance and Reinsurance Contracts Public Policy Questions The Sphere of thè Lex Contractus 'Ratione Materiae': Artide 10(1) The Law Applicable to thè Formation and thè Validity of Insurance and Reinsurance Contracts Artide 8 of thè Rome Convention: thè Formation of thè Insurance Contract Artide 8 of thè Rome Convention: thè Validity of thè Insurance Contract The Law of thè Piace of Performance (lex loci soiutionis) and Insurance and Reinsurance Contracts The Law Applicable to thè Interpretation of Insurance and Reinsurance Contracts The Sphere of thè Law Applicable to thè Insurance Contract 'Rattorte Personae' The Law Applicable to thè Form of Insurance and Reinsurance Contracts The Impact of Articles 9 (Form) and 14 (Burden of Proof) on thè National Rules of Insurance Contracts: Example of Impact on Civil Law Systems 120

7 xviii 25. The Law Applicable to thè 'Direct Action' of thè Victim Against thè Insurer of thè Person Liable The Law Applicable to thè Subrogation of thè Insurer The Relationship Between Articles 13 (Subrogation) and 6 (Individuai Employment Contracts) The Law Applicable to Insurance Warranties Renvoi Incapacity Voluntary Assignment of Credits Evaluation 126 (a) Strengths of thè Rome Convention in Relation to Insurance and Reinsurance Contracts 126 (b) Weakness of thè Rome Convention in Relation to Insurance and Reinsurance Contracts Options for Reform 128 (a) The US Restatement (Second) Conflict of Laws 128 (b) A Special Rule for thè Consumer Contracts of Insurance Services? 128 (e) Re-wording Artide The Choice of Law Rules in thè Second and Third Non-Life Directives Introduction Scheme of thè Set of Choice of Law Rules in thè Second and Third Non-Life Directives Scheme of thè Choice of Law Rules in thè Second Non Life Insurance Directive Scheme of thè Choice of Law Rules in thè Third Non Life Insurance Directive The Definition of 'Mass Risks' and 'Large Risks' 133 I. The Choice of Law Rules in thè Second Non-Life Insurance Directive The Scope of Application 135 (a) Is thè Establishment of thè Insurer in a Member State of thè European Community Necessary for thè Application of thè Choice of Law Rules of thè Second Non-Life Directive? 135 (b) Are thè Choice of Law Provisions of thè Second Non-Life Directive Applicable to Insurance Contracts Beyond thè Scope of Application of thè Non-Life Insurance Directives? The Problem of Characterisation in thè Insurance Directives 137

8 xix 8. The Law Applicable to Insurance Contracts Covering Risks Situated in thè Member State Where thè Policyholder has his Habitual Residence or its Central Administration The Law Applicable to Insurance Contracts Covering a Risk Situated in a Member State Where thè Policyholder is not Habitually Resident The Law Applicable to Insurance Contracts Covering Risks Situated in Different Member States Where thè Member States Indicated in Artide 7(l)(b) and (e) Grant thè Parties Greater Freedom to Choose thè Governing Law of thè Contract The Law Applicable to Insurance Contracts Covering Risks Which are Limited to Events Occurring in One Member State Other Than thè One in Which thè Risk is Situated The Law Applicable to Insurance Contracts Covering 'Large Risks' The Law Applicable in thè Absence of a Choice or a Valid Choice Dépecage The Law Applicable to Insurance Contracts Covering Risks Situated in and Outside thè Territories of thè Member States of thè European Community The 'General Provisions of Private International Law': Artide 7(3) Does Artide 5 of thè Rome Convention Apply to thè Insurance Contracts Referred to by thè Second Non-Life Directive? Mandatory Rules: Artide 7(1) (g) Mandatory Rules: Artide 7(2)(1) Mandatory Rules: Artide 7(2) (2) The Relationship Between Public Law Provisions and Choice of Law Rules in thè Second Non-Life Directive Some Remarks on thè Conflict of Laws Issues Arising from Bad Faith Insurance '-" 24. Evaluation '54 (a) An Excessively Restricted Choice of Law 154 (b) Limiting thè Freedom of Services Within thè Single Insurance 154 Market (e) Lack of Co-ordination Between thè Jurisdiction rules of thè Brussels Convention and thè Choice of Law Rules of thè Second Non-Life Directive 155 (d) Lack of Choice of Law Rules on thè Agency Relationship 155 (e) Lack of Co-ordination Between Public Law and Choice of Law Rules 156

9 xx (f) Excessive Freedom of Implementation of thè Choice of Law Rules 156 II. The Choice of Law Rules in thè Third Non-Life Insurance Directive The Law Applicable to Insurance Contracts Covering 'Large Risks': Artide The Law Applicable to Insurance Contracts Covering 'Mass Risks': Artide The Relationship Between Mandatory Rules and 'General Good' The Relationship Between Articles 28 and 7(l)(a), (b), (e), (d), (e) of thè Second Non-Life Directive From thè Free Choice of Law Rule to thè 'Aware Choice of Law' Principle: Artide 31(1), (2), (3) Evaluation 161 (a) Strengths of thè Choice of Law Rules of thè Third Non-Life Directive 161 (b) Weaknesses of thè Choice of Law Rules of thè Third Non-Life Directive Options for Reform 163 (a) Providing an answer to thè questìons Arising from thè Notion of 'General Good' 163 (b) Re-wording Artide 1(3) of thè Rome Convention Applicable Law under thè Second and Third-Life Assurance Directives Introduction Scheme of thè Set of Choice of Law Provisions in thè Second and Third Life Assurance Directives 165 (a) The Choice of Law Provisions in thè Second Life Assurance Directive 166 (b) The Choice of Law Rules in thè Third Life Assurance Directive 166 I. The choice of law rules in thè Second Life Assurance Directives The Relevant Connecting Factors 167 (a) The Law of thè Member State of thè Habitual Residence of thè Policy-Holder 167 (b) Nationality Where thè Member State of thè Commitment Grants thè Parties Greater Freedom to Choose thè Governing Law of thè Contract 170

10 xxi 5. 'The General Provisions of Private International Law': Artide 4, paragraph Dépecage Does Artide 5 of thè Rome Convention Apply to thè Assurance Contracts Referred to by thè Second Life Assurance Directive? Public Policy Mandatory rules: Artide 4(4) 173 (a) Artide 4(4)(1) 174 (b) Artide 4(4) (2) The Scope of Application of thè Governing Law of thè Contract The Law Applicable to Group Life Insurance, Health and Disability Insurance Contracts The Law Applicable to thè Rights of thè Third Party Beneficiary of a Life Assurance Contract Some Remarks on thè Conflict of Laws Issues Arising from thè Specific Clauses Indicating thè Third Party Beneficiary in a Life Assurance Contract The Law Applicable to Loans Contained in Life Insurance Policies The Relationship Between Business Rules and Choice of Law Provisions in thè Second Life Assurance Directive Evaluation 181 (a) Strengths of thè Choice of Law Rules of thè Second Assurance Directive 181 (b) Weaknesses of thè Choice of Law Rules of thè Second Life Assurance Directive 183 II. The Choice of Law Rules in thè Third Life Assurance Directive Where thè Policyholder Takes thè Initiative to Take Out an Assurance and Enters into Contact with thè Insurer in thè State of Origin: Artide The Relationship between Articles 28 of thè Third Life Assurance Directive and 4 of thè Second Life Assurance Directive ' From thè Free Choice of Law Rule to thè 'Aware Choice of Law' Principle: Artide Evaluation 189 (a) Strengths of thè Choice of Law Rules of thè Third Life Assurance Directive 189 (b) Weaknesses of thè Choice of Law Rules of thè Third Life Assurance Directive Options for Reform 191

11 xxii (a) Providing an Answer to thè Questions Arising From thè Notion of 'General Good' 191 (b) Re-wording Artide 1 (3) of thè Rome Convention The Implementation of thè EC Choice of Laws Provisions for Insurance Contracts in thè United Kingdom Introductory Remarks The Implementing Acts of thè Rome Convention and Insurance Directives The Format of thè Provisions The Choices Made 195 (a) The Extent of Party Autonomy 195 (b) Party Autonomy According to English law 195 (e) Party Autonomy by Way of Renvoi 195 (d) Where There is No Choice of Law by thè Parties 196 (e) Choice of Law Within thè United Kingdom 196 Part IV. The European Private International Law of Compulsory Insurance 12. The EC Choice of Law Rules for Compulsory Insurance Contracts: thè General Rules Introduction The Substantive Law Background in Europe Choice of Law Problems in Transnational Compulsory Insurance 201 (a) Different Types of Compulsory Insurance 201 (b) The Need for Specific Conflicts Rules on Compulsory Insurance Choice of Law Rules 203 (a) The 1980 Rome Convention and thè Law Applicable to Compulsory Insurance Contracts Covering Risks Situated Outside thè Territories of thè Member States of thè European Community 203 (b) The Applicable Law 204 (e) Artide 5 of thè Rome Convention and thè Law Applicable to Contracts of Compulsory Insurance The Second Non-Life Insurance Directive and thè Law Applicable to Contracts of Compulsory Insurance Covering Risks Situated in thè Territories of a Member State of thè European Community: An Overview of thè Set of Choice of Law Rules 205 (a) Scheme of thè Set of Choice of Law Rules for Compulsory Insurance in thè Second Non-Life Directive 206

12 xxiii (b) Artide 8(1) 206 (e) The Law Applicable to Compulsory Insurance Contracts Covering Risks Situated in Different Member States: Artide 8 (4) (a) 208 (d) The Law of thè Member State Imposing thè Obligation to Take Out Insurance and thè Law Applicable to Compulsory Insurance Contracts: Artide 8(4)(e) 208 (e) The Specific Provisions Relating to Compulsory Insurance Laid Down by thè Member State Imposing an Obligation to Take Out Insurance and thè Law Applicable to Compulsory Insurance Contracts: Artide 8(2) 209 (f) Mandatory rules: Artide 8(3) 210 (g) Mandatory rules: Artide 8(4)(d) The Duty of thè Member States to Communicate to thè Commission thè Risks Against which Insurance is Compulsory: Artide 8(5)(a) and (b) Evaluation 213 (a) Complexity 213 (b) An Excessive Freedom of Implementation of thè Choice of Law Rules 213 (e) Objections to This 214 (d) Forum Shopping 214 (e) The Objective of thè Second Non-Life Directive 215 (f) Uncertainty 215 (g) Lack of Co-ordination Between thè Jurisdiction Rules of thè Brussels Regulation and thè Choice of Law Rules for Compulsory Insurance Options for Reform 216 (a) Repealing thè Implementation Provisions of Artide 8(4) (e) 216 (b) Re-wording Artide 1(3) of thè Rome Convention The EC Choice of Law Rules for Motor Vehicle Insurance Contracts Introduction The Law Applicable to Motor Vehicle Insurance Contracts under thè European Rules of Private International Law 221 (a) The 1980 Rome Convention and thè Law Applicable to Motor Vehicle Insurance Contracts Covering Risks Situated Outside thè Territories of thè Member States of thè European Community 221 (b) The Second Non-Life Insurance Directive and thè Law Applicable to thè Motor Vehicle Insurance Contracts Covering Risks Situated in thè Territories of a Member State of thè European Community 221

13 xxiv (e) Artide 7(1) (a) of thè Second Non-Life Directive and thè Law Applicable to Motor Vehicle Insurance Contracts 222 (d) Artide 8(4) (e) of thè Second Non-Life Insurance Directive and thè Law Applicable to Motor Vehicle Insurance Contracts 223 (e) Private International Law Aspects of thè Third Motor Vehicle Insurance Directive 224 (f) The Relationship Between Contract and Tort in thè Field of Motor Vehicle Insurance 224 (g) The Law Applicable to Punitive Damages 225 (h) Examples of Mandatory Rules in thè Field of Motor Vehicle Insurance 227 (i) The Law Applicable to thè Claims for Damages under thè Motor Insurers Bureau System 228 (j) Final remarks 229 Part V. The European Private International Law Rules of Insurance and Reinsurance Contracts Concluded by Electronic Means 14. Electronic Commerce Law in Europe Introduction The Freedom to Provide Insurance Products and Services by Electronic Means in Europe The 2000 Directive on Electronic Commerce 236 (a) The Aim of thè Directive 236 (b) The Scope of Application 237 (e) Commerciai Communication/Advertising and Promotions 237 (d) Contracts Concluded by Electronic Means Draft Directive on thè Distance Marketing of Financial Services 238 (a) The Aim of thè Draft Directive 238 (b) Distance Contracts 238 (e) Other Definitions 239 (d) Information of thè Consumer Before Conclusion of thè Contract Are thè EC Directives and Proposals Related to Online Commerce Pro-consumer? Insurance and Reinsurance Contracts Concluded by Electronic Means: Jurisdictional and Applicable Law Problems Introduction Jurisdictional Problems in Transnational Insurance and Reinsurance Contracts Concluded by Electronic Means Jurisdiction under thè Brussels and Lugano Conventions 243

14 xxv (a) The Absence of Special Rules of Jurisdiction for Contracts Concluded by Electronic Means 243 (b) Jurisdiction in Matters Relating to Insurance and Reinsurance Evaluation 247 (a) Artide 13: an Unsuitable Provìsion for Jurisdictional Agreements Concluded in thè Online Environment Options for Reform 248 (a) Re-wording Artide (b) A Special Rule for Jurisdictional Agreements Contained in Contracts Concluded by Electronic Means Choice of Law in Relation to Insurance and Reinsurance Contracts Concluded by Electronic Means Introduction The 1980 Rome Convention and thè Law Applicable to Insurance Contracts Concluded by Electronic Means 252 (a) The Applicable Law Artide 5 of thè Rome Convention and thè Law Applicable to Insurance Contracts Concluded by Electronic Means 253 (a) Specific Invitation 254 (b) Previous Advertising 254 (e) Steps Necessary for thè Conclusion of thè Contract 255 (d) Order Received in thè Country of thè Consumer's Habitual Residence The Law Applicable to thè Form of Insurance and Reinsurance Contracts Concluded by Electronic Means The 2000 Directive on Electronic Commerce and thè Law Applicable to Insurance and Reinsurance Contracts The Second Non-Life Directive and thè Law Applicable to Insurance Contracts Concluded Over thè Internet Covering Risks Situated in thè Territories of a Member State of thè European Community Artide 7(l)(a), (b), (e) of thè Second Non-Life Directive and thè Law Applicable to Insurance Contracts Concluded by Electronic Means The Second Life Directive and thè Law Applicable to Insurance Contracts Concluded by Electronic Means Final Remarks General Conclusions The Need for a Review of thè Rules on Jurisdiction in Insurance Matters 261

15 xxvi 2. The Unsatisfactory State of thè Law Applicable to Insurance Contracts 262 Appendices 267 Bibliography 303