Use the Lexology Navigator tool to compare the answers in this article with those from other jurisdictions.
What general rules, requirements and procedures govern the conclusion of (re)insurance contracts in your jurisdiction?
The Insurance Contract Act (2496/1997) governs insurance contracts and sets out the minimum content of the policy (Article 1(2)), including general and special terms. The Civil Code rules on the formation of contracts also apply in the absence of special insurance law provisions. Written form is not a prerequisite for the validity of an insurance contract; however, it is necessary to evidence the contract before the courts. Nevertheless, the law requires the insurer to provide the policy, including any applicable general and special terms, to the policyholder in written form, whereas the omission to provide it entitles the policyholder to rescind the contract.
The insurance contract terms must conform to the request for insurance, otherwise the insured is entitled to object to them within the time limit set by law. In addition, policyholders have a cooling-off period (30 days for life contracts and 14 days for non-life contracts) during which they may rescind the contract without any extra cost, provided that they have been so advised by the insurer; if they have not been so advised, rescission may occur within the next 10 months.
The policy terms must take into account the reasonable interests of the policyholder and the insured, and must be clear and easily readable. Consumer contracts are also subject to the consumer law provisions, which are harmonised with EU law, with special emphasis on policies concluded over the Internet, to which specific rules apply. Under Greek law, documents may be in paper or electronic form.
Are (re)insurance contracts subject to any mandatory/prohibited provisions?
(Re)insurance contract terms are not subject to prior regulatory review, approval or regular notification to the Bank of Greece.
The Insurance Contract Act provides guidance on the balancing of rights and obligations between the insurer and the insured, primarily with respect to consumer contracts. A number of provisions which introduce protective rights in favour of the policyholder, the insured or the beneficiary can be contractually structured in commercial covers regarding cargo transfer insurance, commercial credit, or sea and air non-life insurance.
Recent legislation on compulsory insurance, including third-party motor liability insurance, makes it mandatory for the insurer to receive payment of the premium first and then deliver the policy and start the cover. This provision is contrary to the general provisions of the Insurance Contract Act, which leaves it to the parties to agree the commencement of the coverage irrespective of prior payment of the premium. However, it seeks to ensure the streamlined operation of the motor liability insurance market to the benefit of the general public.
Can any terms be implied into (re)insurance contracts (eg, a duty of good faith)?
Article 281 of the Civil Code establishes the duty of good faith in contractual relations, reading: “The exercise of any right is prohibited if it exceeds the limits set by good faith, by the commonly accepted principles of the society and by the social and economic purpose of the right.”
This term can be implied by the courts in any contract; there is settled case law clarifying the duty of good faith in contractual relations. According to the Insurance Contract Act, all of its provisions are ’semi-compulsory’ in the sense that they operate in favour of the policyholder. Thus, policy terms in consumer contracts which are detrimental to the policyholder, insured or beneficiary will be null and void unless otherwise specifically stipulated in the Insurance Contract Act.
What standard or common contractual terms are in use?
Standard, pre-defined general contract terms have been the subject of litigation between insurers and consumer associations following the challenge of a number of terms as abusive under consumer protection law. The main areas of concern have been unclear and non-transparent contract terms with respect to premium increases, and the denial of cover due to the non-disclosure of circumstances material to assessment of the risk.
What is the state of development in your jurisdiction with regard to the use of ‘smart’ contracts (ie, blockchain based) for (re)insurance purposes? Are any other types of financial technology commonly used in the conclusion of (re)insurance contracts?
Greek insurers are closely monitoring developments in the financial technology sector and are gradually implementing them into their insurance activities. However, blockchain (‘smart’) contracts are not commonly used for the conclusion of insurance contracts, the implementation of a contract or the payment of insurance indemnity. The use of e-policies is growing rapidly, as is the aggregation business. In general terms, aggregators seem to provide a satisfactory level of transparency in the way in which they compare available competitive policy options.
What rules and procedures govern breach of contract (for both (re)insurer and insured)?
The policyholder may rescind the contract or object to the policy terms within 14 or 30 days from delivery of the policy, depending on the kind of insurance. The effects run retroactively from the date of signing, and either terminate the contract from the outset or apply modified terms in the case of objections based on deviation of the policy terms from the requested cover.
In the event of misrepresentations by the policyholder regarding objectively essential features of the risk, the insurer may either request the modification of the policy or terminate it by serving a notice in writing, in which case the legal effects of the termination will come into effect within a period of weeks thereof. If the inaccurate information has been provided intentionally, the termination notice shall have immediate effect.
According to Article 8(5) of the Insurance Contract Act, the insurance policy may provide for termination reasons other than those explicitly regulated by the act. Termination by the insurer does not become effective until 30 days after notice of termination has been served. Special provisions apply in case of termination of third-party motor liability insurance and marine insurance contracts.
Click here to view the full article.