Court decision
Additional hearing


In a class action submitted against five insurance companies, the claimants argued that the companies had charged an additional 4% to 6% of interest to non-life insurance policies, despite the relevant circulars that explicitly referred to life insurance, and that these rates had been charged on all the components of the premium, including the savings element.

The insurers argued that this charge was not prohibited by the commissioner of insurance, in reference to the same circulars.

The commissioner of insurance submitted its position to the district court during the certification stage, in which it indicated that the circulars may be interpreted as not prohibiting the charges of this interest concerning all elements of the premium. This was in view of the fact that the premium was calculated on the basis of yearly payments, whereas in fact it was spread out in instalments over the entire year.

Court decision

In the first instance, the district court approved the motion to certify the claim as a class action and it was decided that the position of the commissioner may lead to different conclusions. Although this position should be given a certain weight in the interpretation of the circulars, the court is the entity that provides the decisive interpretation of the matter.

At appeal,(1) the Supreme Court dealt with the question of the status of the commissioner's interpretation of the circulars. Justice Yael Vilner held that the commissioner drafts the circulars, enforces them and is authorised to impose monetary penalties for their breaches. The fact that these legislative, enforcement and quasi-judicial powers were granted to the commissioner by the law shows that it is appropriate to allow the interpretation of the commissioner in order to avoid contradicting interpretations between the court and the commissioner. In addition, the commissioner has specific expertise in this field, which justifies limiting judicial interference with his decisions. As with any other administrative authority, it is assumed that the commissioner has acted in a proper manner.

The Supreme Court unanimously decided that preferred weight should be given to the commissioner's interpretation of a circular, except for instances where it is proved that the commissioner acted in a conflict of interest or took into account factors that were not relevant.

The applicants submitted a request for an additional hearing of the appeal. Such hearings are granted in rare cases where the judgment has a significant impact on the broad scope of other cases, beyond the specific interests of the direct parties to the proceeding.

Additional hearing

The panel at the additional hearing overturned the decision of the Supreme Court and was handed down on 4 July 2021, with a four-to-three majority.

The main judgment was handed down by Justice Melzer, who determined that the task of interpreting laws and administrative legislation lies with the court. In addition, in class actions, the court acts as a part of a mechanism of "checks and balances" and hence the final interpretation is to be made by the court.

The judge set various yardsticks in order to determine in which instances the opinion of the commissioner of insurance would be accepted by the court. In each case the court would check the following considerations:

  • whether the interpretation of the commissioner is in accordance with the rules of interpretation as set by the court and where it is not, less weight would be attributed to it;
  • whether the expertise of the regulator is sufficient to be taken in preference over the interpretation of legal norms where the court is authorised to be the interpreter;
  • whether the opinion of the commissioner was based on a thorough check of the various relevant options;
  • whether the commissioner has drafted the directives or merely gives his opinions on old guidelines;
  • whether the structure of the regulated market and the identity of the parties give rise to a fear that a regulator is in a situation of regulatory fault;
  • whether the position is thorough, well-reasoned and broad in its scope;
  • whether the commissioner has presented contradictory positions concerning the same subject matter;
  • whether there are two regulators in the same field who have presented contradicting positions; and
  • whether the case falls into one of the exceptions set by Judge Vilner – conflict of interest was shown or irrelevant considerations have led to the position.

The judge applied these considerations and concluded that the position of the commissioner was not in accordance with the language of the circulars. The circulars did not apply to the savings plan and the description of the circular as a life insurance tariff did not allow it to apply to other branches of insurance such as personal accidents, etc. In addition, the position is not in line with the objectives of the circulars as the aim is to protect the insureds and hence the commissioner's interpretation should be rejected.

An interesting observation made by the court at the additional hearing was that the commissioner may be in "regulatory captivity" in the insurance market and may prefer the strong and organized group of companies and not the weak and unorganized insureds.

Finally, the additional hearing judgment rejected the position of the commissioner as to its merits which was in favour of the insurance companies.


The insurers cannot assume, when relying on the position of the commissioner in interpreting the circulars and directives (where interpretation is required), that they would be protected from future intervention by the court.

After the Supreme Court's first judgment, various articles were published by academics complaining that giving a preference to the interpretation of the commissioner interferes with the separation of powers between the judicial and administrative authorities. The judgment in the additional hearing echoes the ideas of these articles concerning the powers of the courts as the interpreter of all legislation.

The judgment of the additional hearing reflects the Supreme Court's aim to maintain its dominant position with regard to the administrative and executive bodies of the state. It is a reaction to voices that are calling to lessen the Supreme Court's authority in matters of public interest in particular.

For further information on this topic please contact Peggy Sharon at Levitan, Sharon & Co by telephone (+972 3 688 6768) or email ([email protected]). The Levitan, Sharon & Co website can be accessed at


(1) Additional Hearing of Civil Appeal 4960/18 Zeligman and others v. the Phoenix and others (4-7-2021).