During their meeting on 11 November 2020, the Federal Council decided to bring the revised Law on Insurance Contracts (LCA) into force on 1 January 2022. This law regulates the relationship between insurances and their clients. A review of the new provisions.
This revision brings in improvements for clients and adapts the provisions to the current context. Swiss Risk & Care sees this as beneficial as it provides clients with additional rights. Insurance companies will have one year to comply with the law.
The new provisions of the LCA
A 14 day right of cancellation for insurance policy holders
From now on, policy holders will have a 14 day right to cancel their contract, without obligation. Before the 14th day, all they must do is inform the company of their decision to cancel.
The right of cancellation does not apply to group insurance of persons, provisional coverage and insurance agreements lasting less than one month.
A right of cancellation after three years for long contracts
Policy holders may terminate long term contracts at the end of the third year of insurance. Therefore, if you have subscribed a five-year contract, you may cancel it as of the end of the third year without waiting for the contractually agreed duration. N.B.: this provision is not applicable to life insurance.
Waiver of cancellation rights for insurance companies
The company that provides your supplementary insurance will no longer have the right to cancel the contract following an insurance claim giving rise to a benefit payment. Only policy holders have the right to cancel.
Extension of the limitation period from two to five years
Policy holders will be authorized to make claims on the benefits covered by their insurance policy up to five years following the occurrence. Up to now, the time limit was two years.
In the case of an accident for example, after-effects can occur much later than the accident itself. You may therefore obtain insurance benefits up to five years following the termination of the insurance contract for a case that arose during coverage, without limitation to this right to health insurance.
If, before the conclusion of the insurance contract, the insurance company was already obliged to inform the policy holder, in a comprehensible way and using the means to establish written text proof of their identity and of the main elements of the insurance contract, it will also have to provide information on the new cancellation rights and on the nature of the coverage (fixed sum insurance or damage insurance).
LCA’s compatibility with electronic commerce
In this the digital era, it is now possible to cancel an insurance contract by e-mail.
Introduction of a general direct right of action against all civil liability insurances
An insured person who is the victim of an occurrence will be authorized to contact the insurance company of the person responsible for the damages directly to report the claim, even if the person responsible for the damages is not the person who has contracted the insurance policy. For example, if one of the windows of your house is broken by a football, you may demand damages from the person at fault’s insurance.