The law of 9 October 2023 simplifying the cancellation rules for insurance contracts

On October 9, 2023, a new law was adopted that simplifies the termination rules for insurance contracts. This law, which comes into effect on October 1, 2024, has significant implications for both insurers and insurance intermediaries.

What has changed? Simplification of the termination procedure

Previously, the termination of an insurance contract required a registered letter, a bailiff’s writ, or a termination letter with acknowledgment of receipt. The new law introduces a simplified procedure for terminating insurance contracts. From October 2024, it will also be possible to arrange the termination via an electronic registered letter or a digital environment with a qualified electronic signature. The policyholder receives, on a durable medium, a receipt notification of the termination. However, the insurer is not obliged to provide such a digital environment. This change makes the termination more accessible and fits in the contemporary digital age.

Adjusted termination period

Another important change is the adjustment of the termination period. While the insurer still has to respect a termination period of at least three months before the expiry date, the policyholder now gets more room. The new term for the policyholder is reduced to at least two months before the expiry date. This gives policyholders an extra month to terminate the insurance contract.

Termination without annual expiry date

An important novelty is that consumer policyholders can terminate the insurance contract at any time from the second year. This rule applies to tacitly renewable contracts that:

• provide coverage to consumers within the meaning of the Code of Economic Law (i.e., natural persons acting outside the scope of their professional activities).
• fall under non-life insurance. 

This means that consumers do not have to wait until the annual expiry date of the insurance contract. The termination will then take effect after two months. The insurer reminds the policyholder of this right of termination on each premium expiry notice.

Switching to a new insurer

Another novelty is that consumer policyholders can ask the new insurer or intermediary to arrange the termination of the old insurance contract. This service is already voluntarily offered by many insurers and insurance intermediaries. However, from October 2024, this becomes a right and cannot be refused. This should further facilitate the switch to a new insurer.