EFTA Court – judgement of 10 March 2020
On 10 March 2020 the EFTA Court issued its judgement on the request for an advisory opinion by Liechtenstein’s Princely Court of Justice (Landgericht) of 29 March 2019. The Princely Court of Justice referred a number of questions to the EFTA Court on the interpretation of European Directive 2009/138/EC. The judgement has been published in German and in English on the EFTA Court website (https://eftacourt.int/cases/e-03-19/).
In its judgement, the EFTA Court began by clarifying the term “insurance claim”. It stated that a claim was considered to be an insurance claim if the insured event occurred while the insurance contract was in effect. This means the insurance claim must have arisen before the cancellation of an insurance contract. It is for national law to determine whether, as a further condition, a claim of this nature must have been lodged or admitted before the opening of the winding-up proceedings.
The EFTA Court has also answered the question of whether premium refund claims constitute insurance claims. According to its judgement, this is only the case if the premium refund claimed relates to an insurance contract that was cancelled before the opening of the winding-up proceedings. Where an insurance contract has been cancelled after the opening of those winding-up proceedings, the claim for reimbursement of unearned premiums does not constitute an insurance claim.
Finally, on the issue of equal treatment of insurance creditors, the EFTA Court stated that Directive 2009/138/EC leaves it open to national law whether it wishes to distinguish between categories of insurance claims or to separate such claims into different categories. This is compatible with the Directive, provided those rules ensure that insurance claims take precedence over other claims. It is also necessary to ensure that the principle of equal treatment of insurance creditors and the principle of non-discrimination are respected.
The EFTA Court has provided the anticipated answers on the concept of “insurance claims” and the equal treatment of insurance creditors. Liechtenstein law does not distinguish between categories of insurance claims, and for this reason the creditors of insurance claims have to be treated equally. For a claim to be treated as an insurance claim, the insured event must have occurred while the insurance contract was in effect. The question of whether additional conditions have to be met can only be assessed after examining the individual insurance contract, the insurance conditions applicable to it and relevant national statutory provisions.
By contrast, the EFTA Court’s reply concerning the classification of premium refund claims came as a surprise to the liquidator. The consequence of this is that almost all claims for reimbursement of unearned premiums have to be treated as fourth class bankruptcy claims instead of insurance claims.