Division 2
Entry into Contract
- 428. Information to be disclosed to persons wishing to enter into insurance contracts
(1) An insurer shall ensure that a natural person who wishes to enter into an insurance contract is provided, prior to entering into the contract, with at least the following information:
1) the name and legal form of the insurer;
2) the address of the insurer, and the address of the office through which the contract is entered into if this is not done at the seat of the insurer;
3) standard terms applicable to the insurance contract, and the rights applicable to the contract;
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4) obligations of the insurer if different from those prescribed in the standard conditions;
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5) the period of validity of the insurance contract and conditions for termination thereof;
6) the size of the insurance premiums and the procedure for payment thereof, stating separately the size of different insurance premiums for different insurance covers, if the insurance relationship is to comprise several insurance covers;
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7) the types of charges and fees payable by the policyholder together with insurance premiums and of all other charges and fees affecting the sums payable by the insurer and the amounts thereof;
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8) the term during which the person wishing to enter into the insurance contract is bound by the application to enter into the contract;
9) the address of the competent insurance supervisory body where the policyholder may lodge a complaint concerning the activities of the insurer;
10) the procedure for settlement of complaints and the address of the body which settles insurance disputes and which can be addressed by policyholders for settlement of complaints concerning insurance contracts.
[RT I, 11.04.2014, 1 – entry into force 01.10.2014]
(2) Prior to entry into a life insurance contract, the insurer shall ensure that the policyholder who is a natural person is provided with the following information in addition to the information provided for in subsection (1) of this section:
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1) types of insurance indemnities and terms of payment;
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11) in the case of an insurance contract with profit sharing feature, the principles of determination and distribution of the profit;
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2) surrender value of the insurance contract, if surrender value of such insurance contract can be calculated;
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3) the minimum sum specified in subsection 543 (2) to convert to premium-free insurance and the obligations of the insurer arising from premium-free insurance;
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4) in the case of unit linked life assurance, information concerning the nature of the underlying assets of the insurance and the risks related thereto which allow the policyholder to make a carefully considered investment decision, whereas it is not permitted to emphasise any potential benefits arising from the entry into a unit linked life insurance without clear indication of the risks related to the entry into that contract;
[RT I 2010, 2, 3 – entry into force 22.01.2010]
5) general information concerning the principles of taxation applicable to the insurance contract;
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6) information on where the solvency and financial condition report of insurance undertaking disclosed pursuant to subsection 125 (1) of the Insurance Activities Act is available.
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(21) If the amount of the indemnity payable under a life insurance contract may prove to be bigger than the amount of indemnity guaranteed by the insurance contact and the insurer submits sample calculations of this amount to the policyholder, the insurer shall use at least three different interest rates in these calculations.
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(22) The sample calculations of the amount of indemnity provided for in subsection (21) of this section shall contain a statement that these are based solely on the assumptions made in the calculations and no indemnities in such amounts are guaranteed to the policyholder.
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(23) The provisions of subsection (21) of this section do not apply to term and whole life insurance contracts.
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(3) The provisions on the obligation to provide precontractual information specified in § 141 of this Act shall not apply to preparations for entry into an insurance contract.
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(4) Upon entry into an insurance contract through a representative or with the mediation of an insurance broker, the notification obligation provided for in this section shall be considered performed when the insurer has submitted the respective information to the representative or insurance broker.
[RT I, 07.07.2015, 1 – entry into force 01.01.2016]
- 429. Provision of information during period of validity of contract
(1) During the period of validity of an insurance contract, the insurer shall ensure that information concerning changes to the information specified in § 428 of this Act is communicated to the policyholder who is a natural person.
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(2) In the case of life insurance contracts with profit sharing feature, the policyholder who is a natural person shall be informed once a year of how much supplementary profit was assigned to him or her during the year and how much the amounts payable under the life insurance contract have increased due to this. If the insurer has submitted profit sharing forecasts to the policyholder, the policyholder must also be informed of any difference between the actual profit sharing and the estimated profit sharing.
[RT I, 07.07.2015, 1 – entry into force 01.01.2016; the second sentence of subsection 429 (2) shall apply to the insurance contracts entered into as of 1 January 2016.]
- 430. Manner of notification
Information specified in §§ 428 and 429 of this Act shall be forwarded to the policyholder in a format which can be reproduced in writing and shall be unambiguously worded, clearly organised and prepared in Estonian or, if so agreed, in another language.
[RT I 2002, 53, 336 – entry into force 01.07.2002]
- 431. Application for entry into insurance contract
(1) Application forms for entering into an insurance contract may contain only so many proposals for varying insurance contracts as not to compromise their clarity, readability or intelligibility.
(2) An insurer shall indicate the standard terms applicable to an insurance contract on the application form issued by the insurer or make the standard terms available to the applicant prior to submission of the form or at the same time therewith.
- 432. Consequences of violation of notification obligation
(1) If an insurer fails to perform the obligations provided for in § 428 of this Act, including making the standard terms applicable to an insurance contract available to the policyholder, the contract is deemed not to have been entered into if the policyholder objects to the contract in a format which can be reproduced in writing within 14 days after the information and standard terms are made available to the policyholder.
(2) The term set out in subsection (1) of this section shall commence only if, in addition to the provisions of subsection (1) of this section, the policyholder has been informed in a format which can be reproduced in writing and in typographically clear form of the right to contest and about the beginning and length of the term. The insurer shall prove that the documents were received. Sending the objection within the term shall suffice to make it timely.
(3) Regardless of the provisions of subsection (2) of this section, the policyholder’s right to contest expires after one year after payment of the first insurance premium.
(4) The policyholder shall not have the right specified in subsection (1) of this section if the insurer provides the policyholder with immediate insurance cover and the parties agree to waive the delivery of policy conditions and of the information specified in § 428 of this Act. At the request of the policyholder, the information and policy conditions shall still be delivered thereto together with the policy at the latest.
[RT I 2003, 78, 523 – entry into force 27.12.2003]
- 433. Withdrawal of policyholder from contract
(1) If an insurance contract, including a life insurance contract, is entered into for a term of more than one year, the policyholder may withdraw from the contract within 14 days after entry into the contract without giving a reason. Sending the application for withdrawal within the term shall suffice to make it timely. The provisions of § 56 of this Act apply to distance contracts for life insurance or pension insurance.
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(2) The term specified in subsection (1) of this section shall not commence until the insurer has informed the policyholder of the right to withdraw and the policyholder has confirmed this by a signature. If the policyholder is not informed of the right to withdraw, the right to withdraw shall expire one month after payment of the first insurance premium.
(21) If the policyholder is a consumer, the consumer is obliged to compensate, upon withdrawal, only for the value of the insurance cover until withdrawal from the contract. The expenses relating to compensation and the related risks shall be borne by the insurer. The parties may still agree that the policyholder bears the expenses to the extent of 10 euros, except in the cases where the withdrawal arises from nonconformity of the insurance service. The insurer cannot file other claims against the policyholder besides the claims specified in this subsection.
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(3) The policyholder shall not have the right to withdraw if the insurer provides the policyholder with immediate insurance cover or if the insurance contract is entered into for the policyholder’s ongoing business or professional activities.
(4) The provisions of subsection (3) of this section shall not apply to life insurance contracts.
[RT I 2004, 75, 522 – entry into force 10.11.2004]
(5) Contract terms which impede the right of withdrawal from being exercised by a policyholder who is the consumer, in particular agreements pursuant to which withdrawal is bound to payment of earnest money or a contractual penalty, are void.
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- 434. Policy
(1) An insurer shall issue the policyholder with a document which can be reproduced in writing concerning entry into the insurance contract (policy). At the request of the policyholder, the policy shall be issued in writing.
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(2) At least the information provided for in § 428 of this Act shall be set out in a policy along with:
1) the name and address of the policyholder and the insured person, unless the policy is a bearer policy;
2) the class of insurance, a definition of the object of the insurance contract, a list of insured risks and the term for notification of an insured event;
3) the sum insured or the bases for calculation thereof;
4) the effective date of the contract and the duration of any possible extension of the contract, and the duration of insurance cover;
5) in the case of obligatory insurance, the legislation which renders entry into the insurance contract obligatory.
(3) The data provided for in § 428 of this Act need not be indicated in the policy provided that the policyholder was informed of these data already prior to entry into the contract and the policy refers to it.
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- 435. Replacement of policy and copies of applications
(1) If a policy is lost or destroyed, the policyholder may request the insurer to issue a replacement policy.
(2) The policyholder may request copies of any declarations of intent made in a format which can be reproduced in writing thereby with respect to the contract. The insurer shall inform the policyholder of this right when the policy is issued.
(3) If the policyholder needs a copy in order to perform a legal act with respect to the insurer which has to be performed within a certain period of time and the insurer fails to issue the copy to the policyholder in advance, the running of the term shall be suspended from the submission of a request for a copy to be issued until the receipt of the copy.
[RT I 2002, 53, 336 – entry into force 01.07.2002]
- 436. Disparity between policy and application of policyholder
(1) If the contents of a policy deviate from the application of the policyholder, the deviation shall be deemed to have been approved by the policyholder if the policyholder does not object thereto in a format which can be reproduced in writing within 14 days after receiving the policy.
(2) A deviation shall be deemed to have been approved only if the insurer has brought the provisions of subsection (1) of this section to the attention of the policyholder with a separate notice in a format which can be reproduced in writing at the time the policy is issued. The notice may be replaced by a notation on the policy which is highlighted and separate from the contents of the policy. Each deviation shall be indicated separately.
(3) If the provisions of subsection (2) of this section are not complied with, any deviation shall not be binding on the policyholder and the terms and conditions included in the policyholder’s application shall be deemed to be the terms and conditions of the contract.
[RT I 2002, 53, 336 – entry into force 01.07.2002]
- 437. Commencement of insurance cover
If the term of the obligations of an insurer (insurance cover) is determined in days or a longer period of time, it is presumed that the insurance cover commences at 00:00 on the day following entry into the contract and expires at 24:00 on the last day of the term.
- 438. Retroactive insurance cover
(1) A contract may prescribe that insurance cover commences retroactively prior to entry into the contract.
(2) The insurer shall not require payment of an insurance premium for retroactive insurance cover if the insurer knew or should have known at the time of entry into the contract that the insured event had not occurred.
(3) The insurer does not have a performance obligation when providing retroactive insurance cover if the policyholder knew or should have known at the time of entry into the contract of the occurrence of the insured event. In this case, the insurer may demand that the insurance premiums be paid until the end of the period of insurance in which the insurer became aware of the insured event having occurred, unless the insurer already knew or should already have known of the occurrence of the insured event at the time of entry into the contract.
- 439. Immediate insurance cover
(1) A policyholder may, prior to entering into a contract and using the application to enter into the insurance contract, apply for the insurer to provide the insurance cover prescribed in the contract during the term for which the policyholder is bound by the application (immediate insurance cover).
(2) If an application for immediate insurance cover is submitted, the insurer shall inform the policyholder of whether immediate insurance cover will be provided for or not.
- 440. Obligation of policyholder to notify of material circumstances
(1) Upon entering into a contract, the policyholder shall inform the insurer of all circumstances known to the policyholder which, due to their nature, may influence the insurer’s decision to enter into the contract or to enter into the contract on the agreed terms (material circumstances). Material circumstances are presumed to be circumstances concerning which the insurer has directly requested information in a format which can be reproduced in writing.
(2) The policyholder is under no obligation to inform the insurer of circumstances which are already known to the insurer or which the policyholder may reasonably assume to be known to the insurer.
[RT I 2002, 53, 336 – entry into force 01.07.2002]
- 441. Withdrawal of insurer from contract upon violation of notification obligation
(1) If, in violation of the provisions of § 440 of this Act, a policyholder fails to provide information concerning material circumstances, intentionally prevents material circumstances becoming known or provides incorrect information concerning material circumstances, the insurer may withdraw from the contract.
(2) The insurer shall not withdraw from a contract in the case specified in subsection (1) of this section if:
1) the insurer knew that the information was incorrect or knew of circumstances concerning which information was not provided;
2) failure to provide information or the provision of incorrect information was not the fault of the policyholder;
3) circumstances concerning which information was not provided or concerning which incorrect information was provided ceased to exist before the insured event occurred;
4) the insurer has waived the right to withdraw.
(3) If the policyholder has to inform the insurer of material circumstances on the basis of questions submitted by the insurer in a format which can be reproduced in writing, the insurer may withdraw from the contract on the direct grounds of failure to provide information regarding circumstances not included in the questions only if the circumstances are concealed intentionally.
(4) If the insurer cannot withdraw from an insurance contract on the basis of the provisions of subsection (2) of this section, the insurer may demand higher insurance premiums from the policyholder pursuant to the provisions of § 460 of this Act.
(5) The provisions of subsections (1) to (4) of this section do not preclude the insurer’s right to annul the contract on the grounds of misrepresentation.
[RT I 2002, 53, 336 – entry into force 01.07.2002]
- 442. Term for insurer to withdraw from contract
(1) An insurer may withdraw from a contract on the basis specified in § 441 of this Act only within one month as of the time when the insurer becomes aware or should have become aware of the violation of the notification obligation specified in § 440 of this Act. An insurer may not withdraw from a contract if three years have passed since entry into the contract.
(2) If an insurer withdraws from a contract on the basis specified in § 441 of this Act after the insured event has occurred, the insurer shall perform the obligations arising from the contract if the circumstances concerning which information was not provided had no bearing on the occurrence of the insured event and do not preclude or restrict the validity of the insurer’s performance obligation. When assessing the existence of the insurer’s performance obligation, the proportion of the insurance premiums paid to the insurance premiums which should have been paid if information concerning the circumstances had been provided shall be taken into account.