We deal with insurance relationships every day both insuring the civil liability of drivers, our property, or using other types of insurance. After concluding the insurance contract and paying the insurance contributions, it is expected that in the event of an accident, the insurance company will pay the insurance benefit, therefore, it is often frustrating to receive a negative response from an insurance company. So what is necessary to know for a policyholder who has received a negative response from an insurance company regarding the payment of an insurance benefit?

In practice, insurance companies avoid the recognition of events as insured, refuse to pay insurance benefits, or reduce them in accordance with the insurance rules. At that time, those who turn to lawyers often become acquainted with the said insurance rules, which were allegedly provided to them only during the proceedings when concluding the insurance contract, only during the proceedings.

The problem of proper acquaintance with insurance rules is exacerbated by the fact that today most insurance contracts are concluded remotely.

The question therefore arises as to whether it is sufficient for an insurance company to publish such rules on its website and provide a link to them, whether it is sufficient to forward such rules by e-mail without confirmation of access to them for proper service of insurance rules.

The Civil Code imposes a dual obligation on an insurance company: 1) the obligation to make the rules of insurance publicly available; 2) the obligation to submit a copy of the rules of insurance to the policyholder before concluding the insurance contract. Thus, before the insurance company, according to the rules in relations with the insured person, these obligations must be fulfilled not alternatively (choosing one of them), but both of them.

The answer regarding the obligation to publish the insurance rules is provided in the Insurance Law, which stipulates that the insurance rules must be published on the website of the insurance company. The purpose of this obligation is to enable the person interested in the insurance service to get acquainted with the conditions offered by different insurance companies and to choose the one that best suits his needs. However, it is important that such disclosure of insurance rules does not negate the insurance company’s obligation to deliver the insurance rules to the policyholder in person.

Thus, the insurance company must not only publish the insurance rules on the website, but also provide them to the policyholder, that the insured person knows the rights and obligations of both himself and the insurance company and when and under what conditions the insurance cover applies.

A bigger problem arises with the service of insurance rules and the assessment of this insurance company’s obligation. The law does not detail the method of service of insurance rules, so the question arises as to what is considered appropriate service of insurance rules? The answer can be found in the case law that insurance rules can be served both physically by transmitting insurance rules in paper form and electronically in digital form. Thus, the insurance rules can also be served electronically, and such service is considered appropriate. Therefore, when concluding an insurance contract, it is recommended to get acquainted with the documents forwarded by the insurance company and to analyze them in detail.

The situation seems simple, it is enough to get a file of insurance rules, but in practice the question still arises as to how situations when a person seeking insurance cover pays an insurance premium under an insurance policy and the insurance policy specifies a condition according to which the payment of the contribution is considered as a confirmation from the policyholder that he is acquainted with the insurance rules and has been provided with a copy of these rules.

A common situation where the policyholder – the client does not receive the insurance rules in any form, but by paying the insurance premium, or only a part of it, or by signing the insurance contract, at the same time confirms that he has been duly served with the insurance rules. So how to evaluate: is the policyholder’s confirmation of payment of the contribution / signing of the contract a sufficient basis to approve that the policyholder has been duly served with the insurance rules?

The case law of the Supreme Court of Lithuania on this issue was harmonized only on 2020  December 23 order in civil case no. e3K-3-354-1075/2020. In that case, the Court of Cassation clarified that such approvals of the parties to the contract must be assessed and interpreted in accordance with the rules for the interpretation of the contracts.

On 2021 May 19 Order of the Supreme Court of Lithuania in civil case no. e3K-3-130-611/2021 brought additional clarity to the harmonization of case-law, in which it was acknowledged that although the insurance policy states that the signing of the insurance contract, payment of the insurance contribution or a part thereof is considered to be the policyholder’s confirmation of service of the insurance rules, such confirmation is not sufficient to state that the insurance rules have been properly served. However, in each case, such confirmation by the policyholder of the service of the insurance rules must be assessed in the light of the individual circumstances of the case, taking into account:

1) whether such confirmation has been clearly stated in the contract,

2) whether it was not a surprise term of the contract,

3) how the text of such approval is formed,

4) whether it is legible or not hidden,

5) whether in such a situation, a reasonable person could and should have understood the content of the approval and its consequences, and so on.

This practice means that the mere payment of an insurance contributions or the signing of an insurance contract may not in all cases be recognized as proof of proper service of the insurance policy, even if the insurance policy states otherwise.

Such harmonization of case-law is particularly important and useful in disputes with insurance companies over the award of insurance benefits, which prevents insurance companies from abusing the insurance rules and their stronger position as professionals in their contractual relations.



Černiauskas and Partners Law Firm Advocate Egidija Vėbraitė