Claims
General
What general rules, requirements and procedures govern the filing of insurance claims?
To claim coverage under an insurance policy, an insured event must occur. ‘Insured events’ are defined in the applicable insurance policy and differ depending on the type of insurance. For example, coverage by non-life insurance, such as car insurance, is usually triggered on the occurrence of a specific event. The insured bears the burden to prove that an insured event has occurred and the insurer generally has the burden to prove that, for example, an exclusion applies or the indemnification should be reduced due to the insured's breach of the insurance contract. Evidential requirements are lower where a consumer claims indemnification.
The policy can specify a time period during which a claim must be notified. The remedy for late notice is a reduction in the indemnification proportionate to any loss incurred by the insurer due to the late notice. A statute of limitation always provides an ultimate deadline to notify a claim.
In the case of business insurance, the insurer is entitled to deny a claim if the insured has failed to notify the insurer within one year of the occurrence of the insured event, provided that the policy contains a clause to that effect.
Time bar
What is the time bar for filing claims?
In consumer insurance, the insured must bring legal proceedings against the insurer within 10 years of the date when the claim was triggered according to the insurance policy. Thus, the limitation period could be interrupted only by making a claim to the court or where applicable by a request for arbitration. If a claim has been notified to the insurer within that timeframe, the insured must have at least six months to bring legal proceedings from the date of receipt of the insurers' final decision.
Insurers can shorten the limitation period in non-consumer (business) insurance, and can deny a claim for indemnity if the insured does not notify the claim within one year of the date of the event triggering the claim. In addition, the insurer can order the insured to commence proceedings within one year of the date of receipt of the final decision reached by the insurer.
An insured that fails to comply with the timeframe outlined above loses its right to indemnity.
Reinsurance contracts are not covered by the Insurance Contracts Act. Therefore, the time limit for making a claim is set out in the reinsurance contract. Claims for reinsurance indemnification are subject to the ordinary statute of limitations in the Swedish Limitations Act. The limitation period could be interrupted by a written demand, for instance.
Denial of claim
On what grounds can the (re)insurer deny coverage?
Usually, an insurer may deny a claim where:
- the insured event is not covered by the policy;
- a claim is time barred;
- the insured has acted fraudulent; or
- the insured is otherwise in breach of contract.
However, the Insurance Contracts Act provides certain restrictions for an insurer to deny a claim in full due to the insured’s breach of contract. In most cases, a breach of contract would result in a partial reduction of indemnity.
Whether a reinsurer has the right to deny a claim generally depends on the boundaries of the reinsurance contract and the cedents’ actions in relation therewith.
What rules and procedures govern the insured’s challenge of the denial of a claim?
Insurers are required to have internal procedures for the management of consumers' complaints.
Insurers usually have internal procedures for the management of disputes relating to claims decisions (eg, in the form of a review committee). However, these internal procedures are not regulated by law and are therefore not mandatory.
Third-party actions
On what grounds can a third party file a claim directly with the (re)insurer?
Under the Insurance Contracts Act, a third party may in some cases be entitled to receive indemnity under an insurance policy ahead of the insured (eg, where a third party has a secured interest in the policyholder's insured property).
Where there is a statutory requirement to hold liability insurance, a third party is entitled to bring a claim directly against the insurer. Insurance intermediaries, accountants and real estate agents are, among others, required to hold liability insurance. Motor vehicle insurance is subject to the same rules.
A third party can also claim directly against the insurer under a liability policy if any of the following applies:
- The insured is bankrupt;
- The insured has been dissolved (in the case of a legal entity).
- A court has ordered the public liquidation of the insured.
Punitive damages
Are punitive damages insurable?
Punitive damages are not awarded under Swedish law. However, punitive damages are both insurable and reinsurable under Swedish law.
Subrogation
What regime governs (re)insurers’ subrogation rights?
According to the Insurance Contracts Act, an insurer has a right of subrogation to the insured's claim for damages resulting from loss, if the claim is covered by the insurance policy and has been indemnified by the insurer. It is also common for the insurance policy to contain a subrogation clause, which could cover any and all claims for which the insurer has indemnified the insured (ie, not only the insured’s claim for damages). The insured’s claim against a third party may also be transferred to the insurer.
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