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What general rules, requirements and procedures govern the filing of insurance claims?
When incurring a loss covered under an insurance policy, the insured must make a claim to the insurer. The policy may provide for a delay, under which the claim should be issued and documentation to be provided by the claimant in relation to the loss incurred. It should also be emphasised that the burden of proof relies on the claimant. The insurer may reduce the payment of the benefit or refuse to pay a late claim (if and when covered) only if the right to such a denial is expressly provided for in the insurance policy and the late claim caused damages to the insurer.
What is the time bar for filing claims?
Insurance The time bar for actions arising from an insurance contract (including claims by the insured against the insurer) is two years after the occurrence of the event giving rise to the action.
A limitation period of 10 years applies in relation to:
- life insurance contracts where the beneficiary is different from the policyholder; and
- insurance contracts covering personal injury where the beneficiaries are heirs of the deceased insured.
Reinsurance Reinsurance contracts are not subject to the French Insurance Code provisions on insurance contracts and therefore are not subject to the time bar applying to insurance contracts. As such, the general five-year time bar provided for contracts under the Civil Code applies.
Denial of claim
On what grounds can the (re)insurer deny coverage?
The grounds on which coverage can be denied include:
- fraudulent claims;
- expiry of the claim period (subject to specific conditions);
- absence of coverage or exclusion; and
- loss pre-existing the conclusion of the insurance contract.
What rules and procedures govern the insured’s challenge of the denial of a claim?
No specific provisions under the French Insurance Code govern the insured's challenge of a claim denial.
Usually, the insured will try to reach an amicable solution with the insurer's claim settlement or ombudsman services, or have recourse to a third-party mediator (eg, the mediator of the French Insurance Federation) before initiating judicial proceedings. The parties to the insurance contract may also agree on alternative dispute resolution (eg, arbitration).
On what grounds can a third party file a claim directly with the (re)insurer?
A third party may file a claim directly with an insurer in two situations:
- Where the beneficiary under the policy is different from the policyholder, it can make a claim if and when the event covered under the policy materialises, despite being a third party to the policy.
- In relation to liability insurance policies, third parties that have incurred damages for which the insured would be liable may make a direct claim to the insurer. The insurer may oppose the third party on the same conditions, limits of cover and exclusions provided under the policy that it would invoke against the policyholder or insured.
A third party may also have recourse to a derivative action to make a claim on behalf of the policyholder in relation to property insurance. However, such a claim would ultimately benefit the policyholder, rather than the third party. The recourse to such action may also be contemplated in the context of reinsurance.
Are punitive damages insurable?
French law does not recognise punitive damages or exemplary damages in relation to civil (eg, tort) proceedings. However, criminal judges can issue fines, the amount of which would not benefit the victim.
Civil judges can grant damages only up to an amount which they consider would be necessary to repair the loss incurred by the claiming party, on the basis of the ‘full compensation’ principle.
Market practice in France excludes coverage of punitive damages and therefore must exclude coverage of insureds that may be sentenced to punitive damages abroad.
What regime governs (re)insurers’ subrogation rights?
The insurer which paid the indemnity is (subject to exceptions) subrogated, up to the amount of such indemnity, to the rights and actions of the insured against third parties which caused the damage that triggered the insurance coverage. The insurer may be partially or fully discharged of its liability against the insured when the subrogation cannot be operated in favour of the insurer because of the insured.
The French Insurance Code provides no specific rules in relation to reinsurers’ subrogation.
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