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What general rules, requirements and procedures govern the filing of insurance claims?
The Insurance Contracts Act governs the rules, requirements and procedures for filing insurance claims.
The insured must notify any insurance events without undue delay. The insurer may, however, invoke remedies only if a late notification can be deemed grossly negligent and the late reporting has resulted in a higher loss for the insurer than would have been the case with a timely notification.
Further, the insured must file its claim at the latest one year after the insurance event in order to maintain its rights under the insurance. The claim can be made orally, in writing and on any readable media. If a claim has not been made within the one-year period, the insured loses all rights under the insurance. The one-year deadline to make claims does not apply to personal insurances that are not sole risk-based accident and illness insurances.
If a claim is made within the one-year period, the claim is not time-barred until the end of the calendar year 10 years after the insurance event occurred, unless the insurer denies the claim in a formal letter. If so, legal steps must be taken before the courts within six months of the insured receiving the claim denial letter in order for the claim not to be time-barred at the end of the period.
If the grounds for reducing or denying a claim are based upon criticism of the insured or anyone that the insured is identified with in connection with the insurance event or making of a claim, the insurer must send a formal letter invoking its rights without undue delay or else the insurer's rights are forfeited. This also applies in fraud cases. ‘Without undue delay’ is interpreted as two to three months after the insurer obtains all relevant information in order for it to invoke its rights, or no more than two months after the conclusion of a police investigation if that is necessary. The insurer also has a duty to ensure due process of investigation while the police investigates the circumstances relevant for the insurance cover.
What is the time bar for filing claims?
Please see the section titled “General” above.
Denial of claim
On what grounds can the (re)insurer deny coverage?
An insurer may deny a claim based on a number of grounds related to the conditions used in the contract – for instance, that the insurance event occurred or a claim was made outside of the policy period, that the insurance event itself is not covered under the insurance, and even that the insurance event is specifically excluded.
In addition, the Insurance Contracts Act has established the right for the insurer to terminate, or reduce or deny, an insurance claim in the following circumstances:
- Misrepresentation or non-disclosure at the time of entering into the contract or making a claim;
- Change of risk during the insurance period;
- Breach of security regulations highlighted in the insurance policy;
- Intentional and gross negligent causations of the insurance event. In liability insurance, the insurer is obliged to cover gross negligent behaviour without any reductions or reactions towards the assured; or
- Lack of mitigation of risk.
Demonstrating a mere breach of the above obligations is insufficient in order for the insurer to invoke any reactions. In addition, there must be causation between the breach and the loss. In relation to misrepresentation and non-disclosure, the causation must be between the breach and the insurer's decision to provide the insurance to the policyholder. Also in all the situations above, the breach must have been made with a degree of negligence or intent.
In personal insurances, a number of specific formalistic rules apply in addition to the above in order to ensure consumer protection and to avoid misuse of personal data.
For reinsurance contracts and insurance contracts not governed by the mandatory provisions of the Insurance Contracts Act, general contract law applies, which in most cases means that the remedies available for the parties must be agreed in the insurance contract in advance in order to be used – except in extreme situations.
What rules and procedures govern the insured’s challenge of the denial of a claim?
A denial of a claim can be challenged in many ways, but in order to ensure that the claim is not time-barred, the insured must either send a complaint to the Financial Complaint Board or to the regular courts (the Conciliation Board or the city court where applicable).
On what grounds can a third party file a claim directly with the (re)insurer?
Under the Insurance Contracts Act, third parties have a right of direct action against the liability insurer of the insured. The insurer is free to invoke all provisions and exclusions in the insurance contract against the third party, with the exception of any provisions entitling the insurer to invoke remedies due to actions or omission by the insured after the insurance event has arisen. The insurer is also free to invoke all defences that the insured would have had against the claim from the third party – for example, that the conditions for liability are not met or that the claim is time-barred.
In practice, the direct action possibility is used in almost all cases where liability insurance is known to have been taken out.
There is no right for direct action against a reinsurer.
Are punitive damages insurable?
Insurers operating in the Norwegian market are barred from marketing insurance for, or pay claims, loss or expenses with, punitive elements.
What regime governs (re)insurers’ subrogation rights?
The (re)insurers’ subrogation rights are not governed by the Insurance Contracts Act, but rather by the Norwegian Act on Torts 1969 and case law. In general, the insurer subrogates automatically in the rights of its insured at the time of payment of the insurance claim, without any need for subrogation receipts or otherwise. If the recourse claim is made in consumer-related insurance matters, the insurer needs to demonstrate that the tortfeasor acted with gross negligence, which is a higher threshold of proof than simple negligence, which will suffice in all other matters.
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