The Applicability of Unilateral Termination in Public Insurance Markets: A Double Reservation and Guarantee

The power of unilateral termination that the insurer can exercise under the conditions of article L. 113-12 of the insurance code – by sending a registered letter to the insured at the end of the one-year period. least two months before the expiry date of the contract – is it applicable to public insurance markets? Yes, answers the Council of State in a decision of principle, but subject to a double reservation accompanied by a double guarantee.

A double reserve

The double reservation concerns the obligation imposed on the insurer to provide sufficient notice of termination to allow the public entity to enter into a new insurance contract as well as the prerogatives recognized to the latter in the event that this obligation is not respected.

Public insurance markets being public law contracts by determination of the law (see MURCEF Law of December 11, 2001 and art. L. 6 CCP), the general principles applicable to administrative contracts in fact apply to them. However, they allow the Administration to require the insurer to continue the contract for reasons of general interest, for example due to the fact that its execution is necessary for the continuity of the public service for which it is responsible. It is a pure and simple application of the rule of public order established by case law Company Grenke rental from which it appears that, “in contracts which do not have as their object the actual execution of the public service”, the “co-contractor cannot proceed with the termination without having first given the public entity the opportunity to object to the termination of contractual relations for reasons of general interest, drawn in particular from the requirements of the public service” (CE October 8, 2014, no. 370644, Dalloz Actualité, October 14, 2014, obs. D. Poupeau; Lebon ; Buckwheat 2015. 396 note F. Melleray ; ibid. 2014. 1975 ; D. 2015. 145 note S. Pugeault ; RDI 2015. 183, obs. N. Foulquier ; AJCT 2015. 38, obs. O. Didriche ; AJCA 2014. 327, obs. J.-D. Dreyfus ; RFDA 2015. 47, note C. Pros-Phalippon ).

In the event of non-compliance with this rule, the public entity may refer the matter to the administrative judge for summary proceedings (CE July 29, 2002, Armentières Hospital Center c/ SA Center des Archives du Nordn° 243500, Lebon ; Buckwheat 2002…