As revealed at the XXII Congress of Civil Liability and Insurance Lawyers held in Barcelona, one of the key issues was transparency and how the clauses of these policies are written into the contracts.
The presence of the magistrates of the Supreme Court, Civil Section as Maria Angeles Parra, Pedro Vela and José Luis Seoane influenced the theme of transparency, as well as the closing conference of Juan Antonio XIIol, Vice President of the Constitutional Court.
In a contentious sector such as insurance, both the lack of contractual transparency since the very formulation of its clauses and above all the delimitation of the exclusions is what generates many conflicts between insurers and policyholders, some of which end up in court.
For Sergio Garcia-Valle, president of the Lawyers and CR section of ICAM and member of the Association of Civil Responsibility and Insurance Lawyers, underlines that “transparency in contracts is fundamental in the insurance world in recent years. At the roundtable of Javier Lopez and Garcia de la Serrana and José Antonio Badillo This problem has been solved”.
Sergio García-Valle: “”For insurance contracts to be effective, they must be transparent, understandable, the clauses defining the coverage, such as the limiting ones, must be clear” (Photo: File)
From his point of view, “all this current has been coming from Europe for years. Judgments have already been pronounced stating that in some contracts the meaning of the insurance contract is distorted. There are very low coverages that make the very existence of the insurance contract meaningless”.
In this context, he recalls that “more than one magistrate in this last Congress of Lawyers in CR held in Barcelona highlighted the need for contracts to be transparent, in the sense that they must clearly understand what is the risk that is being insured ”.
This expert remembers a phrase from Antonio Garrighi that said that “Insurance is the antidote to risk”. “To be effective they must be transparent, understandable, it must be clear what the clauses that delimit the coverage are, such as the limiting ones. If they are to be implemented, they must be transparent and understandable, as has been said in Congress”, points out the expert.
You think, “transparency can be applied to all areas of civil liability. When there is an insurance policy, it is obvious that you want to cover a direct risk or circumstance. That insurance contract, if it is not transparent, is useless. Now, the sentences of the Supreme Court are entering into this theme, following the European currents”.
For this jurist, “as for years in banking contracts, the important thing is that they are transparent, the same thing is required in the insurance contract. We are talking about the essence of an insurance contract capable of covering any type of accident that arises”.
The lack of transparency is what causes this sector to have so much litigation: “There are many policies that are an adaptation translated into Spanish. It is a policy that can come from London and which translates in many cases, above all into great risks of exploitation. This means that sometimes it does not fit well with our legislation or loses its essence or clarity”.
Without transparency, conflicts arise
For his part, Manuel Castellanos, president of ANAVA-RC, believes that “Transparency is an important issue under the particular conditions of policies As the insurance industry has a dynamic of attracting policyholders, it runs very aggressive campaigns to get you out of insurance companies and distract you from their obligations in terms of transparent information about what insurance contracts are. These contracts are membership contracts. One side writes the conditions and the other has to assume them”.
Manuel Castellanos: “A large part of the insurance dispute arises from the fact that these clauses of the insurance contract are not clear to the insured” (Photo: File)
For this expert, “the problem is that in the insurance contract the policy has a name and within it there are some exclusions that are no longer effective. It is confluent that you are insured and a consumer, implying that there are important rights when that insurance contract is signed.
In his opinion, “the jurisprudence has delimited the limiting conditions that exclude the guarantees from the policy must be perfectly explicit. They must be highlighted in a separate document and signed by the insured”.
In practice, “this is done tangentially, In many cases these limiting clauses generate some exclusions and in some cases it is not signed. With the speed imposed by the insurance companies for changing company, either they do it over the phone and send it to you by email and that clause is not read, or they do it digitally, with a call they record a conversation. And in that act, almost without reading, you give your consent, but that doesn’t mean you are aware of the limitation.
“At this juncture, problems arise as to what is or is not excluded from the insurance” and the matter is taken to court. It is believed that he has coverage but when he reports the insurance he does not. This happens in most insurance contracts. It is one of the most contentious cases in an industry with high levels of conflict,” he points out.
Castellano we recall that “in the automotive industry it is widely used in repetitive actions. They arise when the driver suffers an accident with damage to third parties and a blood alcohol level higher than the permitted one, the insurance company compensates the victim and then the amount for which it compensated the victim is claimed from the insured. There is also a lot of casuistry here.
Regarding the jurisprudence of the Supreme Court, this jurist underlines that “Now it has to be related to consumer and user regulations, which are particularly protective for the consumer. At the same time the General Procurement Law It’s important. Jurisprudence is prolific and is responding to what was expected of it”.
Above all, it concerns article 3 of the law on the insurance contract “in relation to consumer and user rights. in this jurisprudence the Supreme makes it clear that all is not well, it is said that the insurer must have a greater interest for the insured to know the exclusions that significantly limit the general conditions of the policy. On some occasions, he can void the insurance object you are contracting ”.
Insurers advocate transparency
For her part, Mari Carmen Ruiz-Mataslawyer specializing in civil liability and insurance related to the insurance world, underlines that “obviously I believe that all legal agents who participate in the insurance world are aware that transparency in policies is an essential and therefore mandatory requirement”.
“In many cases, the Supreme Court has come to declare the nullity of the policy when the formulation of its conditions leaves its nature devoid of content, thus losing the meaning of an insurance object” (Photo: File)
In his opinion, “insurance companies are aware of this and they are working to ensure that the new formulations of the same are clearer, more accessible and thus avoid the litigation that involves a complex formulation in the clauses of those “.
According to this jurist, “our Supreme Court has already continuously insisted on this aspect through its sentences, as defended by the different magistrates who spoke at our Congress in Barcelona”.
In this regard, he indicates that “even has come to declare in many cases the nullity of the policy when the formulation of its conditions leaves its nature without content, thus losing the meaning of the insurance object”.
You think, “the insurers are therefore aware of the risk inherent in the obscure wording of the policies and for this reason and following the conflicts on the interpretation of contracts that have arisen after the declaration of the state of alarm due to the COVID pandemic, they are reviewing their policies and emphasizing the obtaining of clearer clauses favoring a much more agile interpretation by the various parties involved.
This jurist deems it convenient that in those sectors where possible, large companies, associations, groups or trade associations, where collective policies are contracted, the insured participates in the drafting of the policyproposing those corrections or improvements that it deems appropriate”.
In this way it is stated that “with this the policy will be “made” in response to the needs of the insured sector and with this all the parties will be favourites”.
He also clarifies that “I had the opportunity to participate in the preparation of the civil liability policy of some groups and Professional Associations and the result was very satisfactory in this sense”.
