LAW OF OBLIGATION ACT, PART 4, CHAPTER 23, DIVISION 4

Division 4

Occurrence of Insured Event 

  • 448. Notification of insured event

(1) A policyholder shall immediately notify the insurer of the occurrence of an insured event.

(2) An insurer may, after the occurrence of an insured event, request information from the policyholder which is necessary to determine the obligation to perform the contract. The insurer may request the submission of evidence insofar as the policyholder can reasonably be expected to submit such evidence.

  • 449. Consequences of failure to give notice of insured event

(1) If an insurer suffers damage as the result of a violation of the obligation provided for in § 448 of this Act, the insurer may reduce its performance obligation to the extent of such damage.

(2) If the policyholder intentionally violates the obligation provided for in § 448 of this Act, the insurer shall be released from its performance obligation.

  • 450. Insurer’s performance obligation upon occurrence of insured event

(1) An insurer’s obligation to perform a contract falls due after the occurrence of an insured event and the completion of the process of determining the extent of the insurer’s performance.

(2) Irrespective of the provisions of subsection (1) of this section, the insurer’s obligation to perform a contract falls due if, two months after notifying the insurer of the insured event, the policyholder requests an explanation from the insurer as to why the process of determining the extent of performance has not yet been completed and the insurer fails to respond to the enquiry within one month.

(3) If the process of determining the extent of the insurer’s performance is not completed within one month after notification being given of an insured event, the policyholder may, if the occurrence of the insured event is established, request that money be paid at the expense of the insurer’s performance obligation in the minimum amount which the insurer should pay under the circumstances. The running of the term shall be suspended for the period during which completion of the process is hindered by circumstances arising from the policyholder.

  • 451. Requirement to pay policyholder penalty for late payment

Any agreement by which the insurer is not required to pay a fine for a delay in the performance of its obligation is void.

  • 452. Release of insurer from performance obligation upon violation of obligations by policyholder

(1) An insurer shall be released from the performance obligation if the policyholder, the insured person or the beneficiary intentionally caused the occurrence of the insured event. Any agreement which derogates from this requirement is void.

(2) The insurer shall not rely on an agreement whereby the insurer is released from the performance obligation upon the occurrence of the insured event due to the policyholder violating an obligation if:

1) the policyholder has violated an obligation, other than the obligation to pay the insurance premium, which is to be performed with respect to the insurer prior to the occurrence of the insured event and the violation is caused by reason other than the fault of the policyholder or if the violation did not affect the occurrence of damage or the extent thereof;

2) the policyholder violates an obligation with respect to the insurer to reduce the insured risk or prevent an increase of the insured risk and the violation had no bearing on the occurrence of the insured event or the insurer’s performance obligation;

3) the obligation was to be fulfilled with respect to the insurer after the occurrence of the insured event and the policyholder did not violate the obligation intentionally;

4) the obligation was to be performed with respect to the insurer after the occurrence of the insured event and the policyholder violated the obligation due to gross negligence, but the violation had no bearing on establishing the occurrence of the insured event or the insurer’s performance obligation.