Claims handling: new deadlines and penalties for insurers

Previously, only insurers in the specific sectors of Motor Vehicle Liability, Fire, Life and Supplementary Pensions were subject to particular deadlines. Other than that, the rules in this area were inconsistent: there was a lack of any general legal framework, meaning that claimants were often kept waiting for a long time. To protect consumers, a general legal framework was needed for the deadlines and penalties applicable to insurers.

The new legal framework applies to all insurance claims submitted from 1 October 2024.

Its scope is limited to direct claimants: subrogated third parties (such as the health insurance fund or another insurer) and service providers such as experts, medical consultants or lawyers are excluded.

The legislators have opted for three separate regimes depending on the insurance sector. A distinction is made between:

• Liability insurance
• Property insurance
• Other insurance

In this article, we focus on the new rules on liability insurance. For insurance in this category, the law is modelled on the rules that already apply to Motor Vehicle Liability insurance..

The deadlines and penalties applicable to a claim depend on whether it is disputed by the insurer. The possible scenarios are as follows:

• Claim not disputed by the insurer:
  • Deadline: The insurer must make a reasoned payout proposal within a period of three months after the submission of a claim. If the extent of the loss is not fully known, the insurer must propose an advance payment within three months. If the claimant accepts the proposal, the insurer will pay this amount within 30 working days.
    
  • Penalty: If no proposal is made within three months, if the proposal is clearly inadequate or if payment is not made within 30 working days, the insurer is legally liable to pay interest at the statutory rate. This is calculated on the amount that is subsequently proposed by the insurer or awarded to the injured party by the court.

• Claim disputed by the insurer:
  • Deadline: If the insurer disputes the eligibility of the claim, its liability or the amount of the loss, it must formulate a reasoned response to the claim within three months.
    
  • Penalty:
    • If the insurer fails to provide a reasoned response within three months, it must pay a fixed amount of 300 euros to the claimant.
    • If the claimant then sends a reminder to the insurer after the expiry of this three-month period and the insurer fails to respond within 11 days, a fixed amount of 300 euros per day of delay will be payable to the claimant from the day on which the reminder is sent until the day on which the insurer provides a response or makes a payout proposal.

Failure to meet the set deadlines will therefore give rise to rapidly increasing compensation.

However, these deadlines will be suspended if the insurer has informed the claimant in writing of reasons beyond its control that make it impossible to meet its obligations properly within the set deadline. Examples here might include multiple claims or highly complex claims.