Supreme Court, Second Civil Chamber, 14 September 2017: Verification of the insured’s declarations

France

Mapping of claims against insurance intermediaries

The profession and litigation procedures have evolved significantly in recent years and judges, and above all insureds, are becoming increasingly demanding. The bulk of liability claims today are brought on the grounds of the duty to inform and advise the client, for which there is little difference between a general agent and a broker.

The case-law of the Supreme Court is consumer-oriented, and the enabling of the Insurance Distribution Directive will doubtless bring little change to the duty to advise already imposed on intermediaries. France is certainly ready to implement the concepts promoted by the European Union as it has been putting them into practice for a long time.

The duty to advise is a key issue in disputes before the French courts. This duty has been imposed by the courts since 1964 and is defined more broadly by the case-law than the French Insurance Code; according to the Court of Cassation, the intermediary must be “a reliable guide and experienced advisor”.

Thus, particular importance is placed on insureds and their protection, along with ever-increasing expectations and increased requirements on the part of intermediaries in terms of formalities.

Supreme Court, Second Civil Chamber, 14 September 2017: Verification of the insured’s declarations

Facts

An insured was denied cover for having misrepresented the risk. The insured claimed that his broker should have verified his declarations at the time he took out the policy. The insured argued that the broker owed him a general duty to verify his declarations.

Decision

The court first held that it was not the broker’s responsibility to verify the accuracy of the insured’s declaration, or to warn him about the consequences of an inaccurate declaration.

In addition, they found that in that case the intermediary had no reason to suspect a false declaration.

CGPA comments

The argument that intermediaries owe a general verification duty was therefore formally rejected in this case, and such duty was not imposed on either the broker or the insurer. Indeed, it is the responsibility of the insured, when taking out an insurance policy to provide, in good faith, all information necessary to assess the risk.

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Supreme Court, Second Civil Chamber, 14 September 2017: Verification of the insured’s declarations

Facts

Decision

CGPA comments

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