Facts and Procedure
Founded on the work of a 1920s Pan-Scandinavian Commission, the Danish Insurance Contracts Act (ICA) has remained almost unchanged since 1930. However, a bill introduced to the Danish Parliament by the minister of justice on March 29 2000, proposed a new Section 120A. The bill follows the ruling of the Danish Supreme Court on June 29 1998 (UfR 1998.1380H) in the Sclerosis Case.
Facts and Procedure
The case concerned a woman who took out accident insurance cover in 1979. The insurance also covered permanent disability from illnesses such as multiple sclerosis, if the illness occurred after the insurance had come into force. Before issuing the policy, the insurance company asked the woman to have a medical examination as she had previously had problems with fixation of the eyes that can be a sign of multiple sclerosis. The neurologist's statement said that there was no evidence that the woman's eye problems had any connection with multiple sclerosis. As a result, the insurer issued the insurance with full coverage in the event of multiple sclerosis.
In 1993 the woman was diagnosed as having multiple sclerosis. She raised an insurance claim. However, the insurer denied that the woman was covered by her insurance policy as the illness, in the insurer's opinion, had occurred prior to the insurance being issued.
Contrary to the Danish High Court, the Supreme Court ruled in favour of the insurer (represented by Dragsted Schlüter Aros), as the first signs of the illness had undoubtedly been present prior to the policy being issued. This ruling was made even though (i) the woman had disclosed all relevant information to the insurer and (ii) the insurer had issued a policy for full cover, in full knowledge of the woman's eye problems.
The Supreme Court's ruling was in strict accordance with Section 120 of the ICA. Section 120 states that injuries or illnesses that 'occur' before an accident insurance policy has come into force, are not covered by the policy. However, effective lobbying by the Danish Multiple Sclerosis Association led to an outcry from members of Parliament (MPs).
In December 1998 a majority of non-ruling party MPs forced the government to set up a commission to (i) issue a proposal that would ensure full cover for a policy holder under the circumustances in the Sclerosis Case and (ii) propose thorough reforms to the ICA.
The first result of the commission's work was introduced to the Danish Parliament on March 29 2000, in the form of an amendment bill.
According to the proposed amendment, a policy holder will be insured even though an illness covered by the policy occurred prior to the policy being issued, if (i) the illness is not diagnosed until after the policy is taken out, and (ii) a doctor or similar medical expert issued a statement regarding the potential policy holder's health prior to the issue of the policy.
The amendment, which is expected to be passed by Parliament in June 2000, implements a 'diagnosis principle' to the ICA. This states that an illness is not considered to have occurred until it has been diagnosed, even though the first signs might have occurred prior to the issue of the insurance policy. The proposed amendment is not expected to have a major effect on the Danish insurance industry and is supported by the Association of Danish Insurers.
It is expected that the commission will issue a report within the next 18 months, including a proposal for a complete reform of the ICA. The report will probably introduce major changes to the ICA, particularly in relation to disclosure and non-disclosure of information, gross negligence and transport insurance.
For further information on this topic please contact David Rubin or Jesper Ravn at Bech-Bruun Dragsted by telephone (+ 45 77 33 77 33) or by fax (+45 77 33 77 44) or by e-mail ([email protected] or [email protected])
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