Deze rubriek wordt verzorgd door mr. B.K.M. Lauwerier en prof. mr. J. Borgesius

Buitenlandse tijdschriften

Data science, actuariaat en verzekeringsstatistiek 

Run for Your Life
The Ethics of Behavioral Tracking in Insurance
E. Steinberg
Journal of Business Ethics 179 (2022) 665-682
doi.org/10.1007/s10551-021-04863-8

In recent years, insurance companies have begun tracking their customers’ behaviors and price premiums accordingly. Based on the Market-Failures Approach as well as the Justice-Failures Approach, I provide an ethical analysis of the use of tracking technologies in the insurance industry. I focus on the use of telematics in car insurance and on the use of fitness tracking in life insurance. The use of tracking has some important benefits to policyholders and insurers alike: it reduces moral hazard and fraud, increases actuarial fairness, and incentivizes safe behavior. These benefits, however, are outweighed by significant moral objections. First, the use of tracking technologies significantly undermines the fairness of the interaction between insurance companies and policyholders. Specifically, the use of tracking eliminates information asymmetries, but in such a way that favors insurers exclusively. Furthermore, tracked behaviors and the ability to choose to behave safely are highly correlated with other variables such as income. Therefore, tracking-based insurance relies on and exacerbates existing inequalities and injustices, which undermines the benefits that tracking is supposed to introduce.

Cyber risk frequency, severity and insurance viability
M. Malavasi, G.W. Peters e.a.
Insurance: Mathematics and Economics 106 (2022) 90-114
doi.org/10.1016/j.insmatheco.2022.05.003

In this study an exploration of insurance risk transfer is undertaken for the cyber insurance industry in the United States of America, based on the leading industry dataset of cyber events provided by Advisen. We seek to address two core unresolved questions. First, what factors are the most significant covariates that may explain the frequency and severity of cyber loss events and are they heterogeneous over cyber risk categories? Second, is cyber risk insurable in regards to the required premiums, risk pool sizes and how would this decision vary with the insured companies industry sector and size? We address these questions through a combination of regression models based on the class of Generalized Additive Models for Location Shape and Scale (GAMLSS) and a class of ordinal regressions. These models will then form the basis for our analysis of frequency and severity of cyber risk loss processes. We investigate the viability of insurance for cyber risk using a utility modeling framework with premiums calculated by classical certainty equivalence analysis utilizing the developed regression models. Our results provide several new key insights into the nature of insurability of cyber risk and rigorously address the two insurance questions posed in a real data driven case study analysis.

A comprehensive model for cyber risk based on marked point processes and its application to insurance 
G. Zeller, M. Scherer
European Actuarial Journal 12 (2022) 33-85
doi.org/10.1007/s13385-021-00290-1

After scrutinizing technical, legal, financial, and actuarial aspects of cyber risk, a new approach for modelling cyber risk using marked point processes is proposed. Key covariates, required to model frequency and severity of cyber claims, are identified. The presented framework explicitly takes into account incidents from malicious untargeted and targeted attacks as well as accidents and failures. The resulting model is able to include the dynamic nature of cyber risk, while capturing accumulation risk in a realistic way. The model is studied with respect to its statistical properties and applied to the pricing of cyber insurance and risk measurement. The results are illustrated in a simulation study.

Informatietechnologie en verzekering

Examining insurance companies’ use of technology for innovation
D. Lanfranchi, L. Grassi
The Geneva Papers on Risk and Insurance – Issues and Practice 47 (2022) 520-537
doi.org/10.1057/s41288-021-00285-y

The insurance industry is innovating. Business models, services and processes are rapidly evolving, largely backed by technological developments. The particular historical context of COVID-19 provides a suitable case to understand the relevance of exploiting technology to react quickly to traditional and emerging risks. Focusing on the initiatives put in place by the most influential insurance companies at the global level, we have framed the innovation mechanisms in the industry, highlighting four rationales underpinning these initiatives (Adaption, Expansion, Reaction and Aggression), which differ according to the relevance of the technology in use and innovation to the portfolio of risks covered. Overall, it emerges that insurance companies have the room and capability to innovate, in many cases using technological applications to cover new and existing risks. While the initiatives studied concern the entire value chain, basic primary activities, such as product development, sales and claims management, show that innovation based on new or existing technology determines the success and competitiveness of the business.

Artificial intelligence, bias and insurance – A technical and legal analysis
P. Pohlmann, G. Vossen, J. Everding, J. Scheiper
Zeitschrift für die gesamte Versicherungswissenschaft 111 (2022) 135-175
doi.org/10.1007/s12297-022-00528-1

Artificial intelligence (AI) can bring significant efficiencies to the data-driven insurance industry. This is also true for the use of AI in relation to potential customers, policyholders, and beneficiaries. However, AI carries the risk of bias, a systematic forecasting error, and thus of discrimination. This interdisciplinary article examines the risk of bias and its causes from the perspective of computer science. Based on this, it discusses from a legal point of view the extent to which non-discrimination law applies in the case of bias and what the legal consequences are. The subsequent analysis of whether and how data scientists can technically eliminate bias leads to the legal question of how insurance supervisory law ensures that bias is avoided as far as possible. Finally, we examine the implications of the EU draft of an AI regulation for the avoidance of bias. How to cope with the assumed inevitability of bias is one of the important questions that future interdisciplinary research of information technology and insurance law has to solve.

Verzekeringseconomie

Der vollkommene Markt – ein nahendes Dilemma der Assekuranz?
M. Fleischer, A. Braun, A. Ufert, F. Walthes
Zeitschrift für die gesamte Versicherungswissenschaft 111 (2022)
217-243
doi.org/10.1007/s12297-022-00530-7

Perfect competition describes the theoretical ideal of a market. For the insurance industry, this paradigm is more current than ever before. The digital transformation shifts the insurance industry closer towards a perfect market. The existing polypolistic market structure splits up into two submarkets: a classical market with customers that rarely compare different offerings and a transparent market in which standardization and comparisons are of central importance. The transparent comparison market is much closer to a perfect market than the classical market. It also implies other profit function drivers. As a consequence, the two submarkets require different competencies. Insurers are confronted with a strategic dilemma: they can either enter the comparison market and specialize on its characteristics by being a fast follower. Alternatively, they have to lay their focus on the permanent break-away from the comparison market and build up unique selling propositions that make them first movers.

A multilayer approach for systemic risk in the insurance sector
G.P. Clemente, A. Cornaro
Chaos, Solitons & Fractals 162 (2022)
112398 
doi.org/10.1016/j.chaos.2022.112398

In this paper, we provide a methodology suitable to identify relevant insurance companies in a systemic risk framework. To this end, we propose a complex network approach where insurers are linked to form a global interconnected system. In particular, we extend the current literature proposing an approach based on a directed weighted multilayer network. The reciprocal influence between insurers is indeed considered in each period and in subsequent periods, calibrating arc weights on the basis of specific risk measures. Hub and authority scores are then used to assess the prominence of a company in spreading and receiving risk from the others.

Insurance: in or out of the ‘too difficult’ box?
S. Basu, M.F. Grace
Accounting and Business Research 52 (2022) 510-535   
doi.org/10.1080/00014788.2022.2080350

IFRS 17 requires a significant change to insurer accounting, and we look at some of the frictions resulting from its implementation. We make three points. First, since IFRS 17 is a principles-based standard, it will be costly to implement. Audit committees must become sophisticated users of the underlying models generating the reports. Second, we examine the effect of the Sarbanes-Oxley Act on U.S. public insurers and a similar law for private insurers to assess the costs of complying with new rules. We find evidence that these costs vary in their incidence across the industry. Third, we conduct an event study of specific announcements regarding IFRS 17 promulgation and implementation. We find a negative sentiment for announcements concerning the implementation. However, we cannot identify a single specific rationalefor the negative sentiment as it could be related to several factors. In sum, we find that there are many reasons to keep insurance accounting as part of IFRS and some reasons that may lead to delays in implementation, but any concern this accounting standard is ‘too difficult’ is likely not due to the standard itself but to other things that may reflect the ultimate net benefits of the standard to investors.

The pan-European Personal Pension Product
Key characteristics and main challenges
M. Bär
Zeitschrift für die gesamte Versicherungswissenschaft 111 (2022) 305-337
doi.org/10.1007/s12297-022-00535-2

Against the background of increasing challenges within the European Union related to ageing societies, a prevailing low interest environment, increasingly mobile life and work across the EU and the general distribution of wealth, several stakeholders within the EU have acknowledged the need to support the adequacy of national public pension schemes. This resulted in the conception of a Pan-European Personal Pension Product (PEPP), voluntary and portable across the European Economic Area (EEA), aiming at combining profitability, transparency as well as the security and quality of the related investments. Embedded into the greater scheme of the aspired European Capital Markets Union, PEPP is intended as simple and affordable savings option for everyone with the goal of closing the pension gap. This paper revisits the process towards the current, finalized state of PEPP, exploring its product features, regulatory requirements and key challenges with regard to the possible emergence of products since 2022.

Is tax aggressiveness associated with tax litigation risk?
Evidence from D&O Insurance 
D.C. Donelson, J.L. Glenn, C.G. Yust
Review of Accounting Studies 27 (2022) 519-569
doi.org/10.1007/s11142-021-09612-w

This study uses directors’ and officers’ (D&O) insurance data to examine the relation between tax aggressiveness and tax litigation risk. D&O insurance covers litigation costs for tax-related cases. Thus D&O insurance premiums provide an independent and direct assessment of the risk in a firm’s tax aggressive strategies, which mitigates some of the challenges in studying tax risk. Based on pricing decisions, D&O insurers appear to view tax aggressiveness, as measured by industry- and size-adjusted cash effective tax rates (a measure where higher rates are associated with more aggressiveness), as increasing tax-related litigation risk. Regarding tax uncertainty, premiums increase (decrease) as unrecognized tax benefits (UTB-related settlements with tax authorities) increase. Finally, D&O insurers focus on firms with outbound tax haven activity when pricing tax aggressiveness. Overall, this suggests D&O insurers include aspects of both low taxes and tax uncertainty when pricing tax litigation risk.

Optimal Nuclear Liability Insurance
A. Louaas, P. Picard
The Energy Journal 43 (2022) 1
doi.org/10.5547/01956574.43.1.alou

We analyze the insurance of nuclear liability risk, from theoretical and applied standpoints. Firstly, we characterize the optimal insurance scheme for a low-probability industrial accident, such as a nuclear catastrophe, when liability is shared between the firm and the State. Using catastrophe bond data, we then evaluate the cost of capital sustaining such an insurance mechanism. Finally, we characterize the individual lotteries associated with the risk of a nuclear accident in France, and we estimate the optimal coverage. We conclude that the liability limit currently in force is likely to be inferior to the socially optimal level.

Leading the green insurance revolution
C. Pugnetti, Th. Gebert, M. Hürster, E. Huizenga, M. Moor
Winterthur: ZHAW Zürcher Hochschule für Angewandte Wissenschaften 2022, 35 p.
doi.org/10.21256/zhaw-2422

Anthropogenic climate change is a significant and growing challenge. Insurance has thus far not taken a leadership role in its response to the challenge, partly because of modeling uncertainties and partly because of unclear customer expectations. It is, however, too large a sector to wait on the sidelines and a more proactive approach is required. The demand for a program we developed for insurance companies in 2021 sends a positive signal for this development. Insurers have started incorporating ESG criteria in their product and service development and have taken steps to control their environmental footprint. Both are challenging, as they involved deep collaboration across the organization and along the value chain. Investment management and risk management have also been evolving to meet the challenge, with the latter especially well-positioned to deliver also market-facing services to insurance customers. Claims handling, however, is not typically considered in an insurer’s footprint and has lagged behind. This is unfortunate, as the potential for a broader societal impact through claims is significant. There are several best practices for transforming organizations to deliver more value along corporate responsibility criteria, and insurance companies need to make treasure of this experience. Further, they need to start developing their purpose beyond purely financial dimensions to align important stakeholders and deliver the promise of insurance as a social good in the 21st Century.

Verzekeringsvermogensbeheer

The Greek sovereign debt crisis as an important chapter in the history of the European Monetary Union
Empirical evidence and some thoughts on implications for investors and financial risk managers
J. Tholl, Chr. Schwarzbach
Zeitschrift für die gesamte Versicherungswissenschaft 111 (2022) 361-378
doi.org/10.1007/s12297-022-00529-0

After the burst of the US real estate price bubble in 2008, the events in Greece played, at least for some time, a unique role on the path towards the European sovereign debt crisis. We examine this issue empirically and then discuss some relevant questions for policymakers, regulators, fixed income investors, and financial risk managers. Our findings should be of interest when modeling risk premia determined in the market for sovereign bonds issued by countries that have introduced the Euro. Given the exposure of the European insurance industry to these fixed-income securities, the results are important for asset managers and financial risk managers that are working in this segment of the financial services industry.

Impact of Brexit news on the stock prices of European insurance companies
An event study approach based on indexation and sub-indexation
A. Müller, S. Reuse
Zeitschrift für die gesamte Versicherungswissenschaft 111 (2022) 379-407
doi.org/10.1007/s12297-022-00534-3

The Brexit referendum in June 2016 led to different publications analysing stock market reactions. This study addresses a research gap, regarding the consideration of other Brexit events and the focus on stock prices of European insurance companies, by using a further refined event study approach based on indexation and sub-indexation. In scope are 17 listed insurance companies based in the European Union or the United Kingdom represented by the Insurance Index. To analyse potential dependencies between abnormal returns and the location of the company (European Union or United Kingdom) or the share of insurance business written in the United Kingdom, the Insurance Index is divided into four sub-indices. The results show significant positive or negative abnormal returns of the Insurance Index. In addition, the sub-indices react differently to the events under consideration. Trends are suggesting that significant abnormal returns may depend on the location and the share of insurance business written in the United Kingdom.

Verzekeringsmarketing en -distributie

Customer Experience Management
Eine qualitative Studie zur Umsetzung in der Versicherungsbranche
L-M. Klopfer, M. Steul-Fischer, A. Zitzmann
Zeitschrift für die gesamte Versicherungswissenschaft 111 (2022) 245-276
doi.org/10.1007/s12297-022-00531-6

Customer experience management has recently received increased attention in both the consumer goods and service industries. The relevance derives in part from the changed consumer behaviour and the increased customer expectations as an outcome of digitalization. Researchers are also increasingly focusing on the management approach, although its implementation by insurance companies has not yet been investigated. This paper therefore examines the status quo of customer experience management in the insurance industry in the form of a qualitative study. NÜRNBERGER Versicherung serves as a case study here. Since 2016 the company has been implementing a customer experience management system for its private customers and has already taken a large number of steps to better understand the needs and demands of its customers in order to offer them an optimal customer experience in every phase of the customer relationship thus contributing to an improvement in customer satisfaction.

Kundenseitige Akzeptanz digitaler Finanzassistenten
Empirische Untersuchung zur Ableitung von Handlungsempfehlungen für die Versicherungspraxis
S. Kwasniok, S. Bora
Zeitschrift für die gesamte Versicherungswissenschaft 111 (2022) 277-304
doi.org/10.1007/s12297-022-00533-4

This study analyses factors that influence customer’s attitude of using digital financial assistants. Digital financial assistants are online applications that allow users an integrated view of their entire financial and insurance situation over several banks and insurers. The study uses findings from technology acceptance research (especially “Technology Acceptance Model (TAM)”) as well as research on the use of internet-based technologies (especially “Internet Users’ Information Privacy Concern (IUIPC)”). The developed model is empirically tested by an online panel (n = 2054), followed by an exploratory modification by means of a factor analysis addressing all question items used. The results of the multiple linear regression analysis show that perceived usefulness, trusting beliefs as well as personal innovativeness and perceived compatibility with user’s own lifestyle have a significant influence on attitudes of using digital financial assistants. Based on this findings implications for insurance companies with regard to developing digital financial assistants are discussed.

Verzekeringsgeneeskunde

Einsatz von KI im Versicherungssektor – mit Schwerpunkt Versicherungsmedizin
Chr. Armbrüster, J. Prill
Zeitschrift für die gesamte Versicherungswissenschaft 111 (2022)
177-189
doi.org/10.1007/s12297-022-00527-2

The use of artificial intelligence (AI) in the insurance sector has recently received more and more attention. In the medical field, which is the focus here, this does not only apply to classical medical topics such as diagnostic and therapeutic measures. Rather, AI is also becoming increasingly important in the various stages of the insurance relationship–from risk assessment and pricing to contract initiation and the settlement of insurance claims. The use of AI opens up many opportunities; however, the user also faces some legal and ethical challenges.

Post COVID-19 condition and its potential impact on disability- A proposal for a calculation basis for the disability insurance sector
C. Suchy S. Wiseman, M. Orban, A. Senn
Zeitschrift für die gesamte Versicherungswissenschaft 111 (2022) 191-208
doi.org/10.1007/s12297-022-00526-3

Post COVID-19 condition can develop after SARS-CoV-2 infection and persists for months. Besides its impact on health-related quality of life, post COVID-19 condition may have an impact on participation in work life and could potentially lead to disability claims (DC). Predicting the number of potential DC is challenging. The purpose of this article is to provide a calculation basis for potential DC arising from post COVID-19 condition during this pandemic. Our projected numbers are based on the current state of medical research and our medical insurance expertise and put into perspective to annual total DC of any cause in Germany for the private sector. Despite the acceleration of the pandemic in recent months, we expect only a minimal increase by 0.5% in annual total DC due to post COVID-19 condition relative to the previous DC expectation for the German private sector. This minor increase can probably be explained by a lower average morbidity and higher vaccination rate in the insured portfolio than among the total working population. This paper reflects the COVID-19 situation in Germany, however, the proposed calculation basis of potential disease-specific DC is transferable to other markets and can serve as a blueprint for estimating the impact of future pandemics on life and health insurance business.

Health professionals’ views and experiences of the Australian moratorium on genetic testing and life insurance: A qualitative study 
G. Dowling, J. Tiller, A. McInerney e.a.
European Journal of Human Genetics (2022)
doi.org/10.1038/s41431-022-01150-6

Australian life insurance companies can legally use genetic test results in underwriting, which can lead to genetic discrimination. In 2019, the Financial Services Council (Australian life insurance industry governing body) introduced a partial moratorium restricting the use of genetic testing in underwriting policies ≤ $500,000 (active 2019–2024). Health professionals (HPs), especially clinical geneticists and genetic counsellors, often discuss the implications of genetic testing with patients, and provide critical insights into the effectiveness of the moratorium. Using a sequential explanatory mixed methods design, we interviewed 23 Australian HPs, who regularly discuss genetic testing with patients and had previously completed an online survey about genetic testing and life insurance. Interviews explored views and experiences about the moratorium, and regulation, in greater depth. Interview transcripts were analysed using thematic analysis. Two key themes emerged from views expressed by HPs during interviews (about matters reported to or observed by them): 1) benefits of the moratorium, and 2) concerns about the moratorium. While HPs reported that the moratorium reassures some consumers, concerns include industry self-regulation, uncertainty created by the temporary time period, and the inadequacy of the moratorium’s financial limits for patients’ financial needs. Although a minority of HPs felt the current industry self-regulated moratorium is an adequate solution to genetic discrimination, the vast majority (19/23) expressed concern with industry self-regulation and most felt government regulation is required to adequately protect consumers. HPs in Australia are concerned about the adequacy of the FSC moratorium with regards to consumer protections, and suggest government regulation is required.

Genetic risk scores in life insurance underwriting 
R. Karlsson Linnér, Ph. D. Koellinger
Journal of Health Economics 81 (2022)
102556
doi.org/10-1016/j.jhealeco.2021.102556

Genetic tests that predict the lifetime risk of common medical conditions are fast becoming more accurate and affordable. The life insurance industry is interested in using predictive genetic tests in the underwriting process, but more research is needed to establish whether this nascent form of genetic testing can refine the process over conventional underwriting factors. Here, we perform Cox regression of survival on a battery of genetic risk scores for common medical conditions and mortality risks in the Health and Retirement Study, without returning results to participants. Adjusted for covariates in a relevant insurance scenario, the scores could improve mortality risk classification by identifying 2.6 years shorter median lifespan in the highest decile of total genetic liability. We conclude that existing genetic risk scores can already improve life insurance underwriting, which stresses the urgency of policymakers to balance competing interests between stakeholders as this technology develops.

Anti-selection & Genetic Testing in Insurance
An Interdisciplinary Perspective
D. Golinghorst, A. de Paor, Y. Joli e.a.
Journal of Law, Medicine & Ethics 50 (2022) 139-154
Doi

Anti-selection occurs when information asymmetry exists between insurers and applicants. When an applicant knows they are at high risk of loss, but the insurer does not, the applicant may try to use this knowledge differential to secure insurance at a lower premium that does not match risk.

Verzekeringsbelastingrecht

The inclusion of insurance services in the European VAT system
A problem that cannot be solved?
O.A. Altenburger, R. Diewald, M. Göttsche
Zeitschrift für die gesamte Versicherungswissenschaft 111 (2022) 339-352
doi.org/10.1007/s12297-022-00536-1

In the European Union insurance premiums are not subject to value added tax (VAT), but—in most member states—to special taxes. As these and VAT on inputs are not recoverable there are high cumulative and hidden tax burdens. However, the inclusion of insurance (and other financial services) in the VAT system poses serious conceptual problems. Solutions suggested and discussed in literature as well as relevant regulations in countries outside Europe do not meet the principles constituting the European VAT system. The paper develops a realizable proposal for the inclusion of insurance services in this system meeting its constituting principles.

Applying VAT to financial services
Is the ‘mobile-ratio method’ adequate for insurance?
O.A. Altenburger
Zeitschrift für die gesamte Versicherungswissenschaft 111 (2022) 353-360
doi.org/10.1007/s12297-022-00532-5

Applying Value Added Tax (VAT) to financial services is difficult. Several more or less complex methods for handling financial services within a VAT system have been developed, none of them being fully satisfactory. In 2018, Julio López-Laborda and Guillermo Peña have published “A New Method for Applying VAT to Financial Services” in the National Tax Journal (vol. 71 (1), pp. 155–181), called ‘mobile-ratio method’. This paper examines whether the new method is adequate for insurance services. It reveals that the analogy between insurance services and other financial services, while amazing at first glance, does not reach far enough to make the “mobile-ratio method” practically applicable to insurance services.

Verzekeringsrecht

I might be a third party but I’m still entitled to cover!:
Admiral International Pty Ltd v Insurance Australia Ltd; Brightcity International Trading Pty Ltd v Admiral International Pty Ltd
W. Rose, M. Hasler
Australian Insurance Law Bulletin 37 (2022) 128-130
ISSN 1035-1639

The Supreme Court considered the entitlement of a third party beneficiary, Brightcity International Trading Pty Ltd (Brightcity), to indemnity for property damage under an Industrial Special Risks (ISR) policy taken out by Admiral International Pty Ltd (Admiral). The Supreme Court found in favour of Brightcity, despite the application of a fraud exclusion in the ISR policy precluding cover to Admiral.

Evaluating the Effectiveness of the Italian Interlocking Ban:
An Empirical Analysis of the Personal Ties Among The Largest Banking and Insurance Groups in Italy
F. Ghezzi, C. Picciau
Journal of Competition Law & Economics 18 (2022) 29-74
doi.org/1-.1093/joclec/nhab 014

In 2011, Italy introduced a ban on interlocking directorates in the financial sector, prohibiting members of the boards of directors and of the internal control bodies, as well as top managers of banking, insurance, and financial companies, from holding any such office in a competing company or group. Empirical studies have demonstrated conflicting results concerning the effectiveness of the Italian anti-interlocking provision. Some studies claim that interlocking directorates have decreased but have not been completely eliminated, which suggests possible persisting limits to competition. Other studies instead show the ban to have a procompetitive effect, at least in the banking sector, which would be at odds with a slight reduction in personal ties. Our article addresses this inconsistency by mapping the interlocking directorates among the 25 largest banking groups and the 25 largest insurance groups operating in Italy before and after the introduction of the ban. We show that although interlocking directorates were widespread at the end of 2010, the interlocking ban reached its goal in the banking and insurance sectors. Anticompetitive effects may, however, still exist, especially considering that the anti-interlocking provision does not affect ownership connections among competing financial companies and groups.

Slow-moving motor-powered vehicles and EU-Compulsory Motor Vehicle Liability:          back to the future?
C. Van Schoubroeck
British Insurance Law Association’s Journal, Platinum Edition 2022, 20 p.
bila.org.uk

This paper focuses on the compensation of traffic accidents caused by new types of lighter and lower speed motor-powered vehicles, such as e-scooters, kick-scooters, electric bicycles, electric skateboards, segways, hoverboards or monowheels under the Directives of the European Union on compulsory motor vehicles liability insurance. Those new types of vehicles propelled by mechanical power have become very popular in road traffic. Unfortunately, there is also a growing tendency of them being unsuitably driven and causing accidents. While those accidents have been covered under the EU Directives since 1972, this situation will change completely because of the modification in 2021 of the definition of vehicle in Directive 2009/103/EC. The modified definition excludes some types of vehicles propelled exclusively by a mechanical power from the scope of this Directive on motor vehicles liability insurance. Consequently, those excluded vehicles are considered as ‘non-motor-powered vehicles’, implying that the protection of the person liable for a traffic accident caused by such a vehicle, and the injured party will be greatly diminished. The landscape of national (non)compulsory insurance and/or specific compensation rules will become more disparate than in the case of specific national exemptions from the insurance obligation, and legal uncertainty as to the applicable compensation system is increasing. The impact on the international traffic compensation system of Bureaux (‘green card system’) is also briefly touched upon.

On the Proposal to Improve the Application of the Principle of Proportionality in Insurance Regulation and Its Impact on the Principle – Theoretical Analysis
M. Ostrowska
British Insurance Law Association’s Journal, Platinum Edition 2022, 18 p.
bila.org.uk

The principle of proportionality is well-known as a general legal principle of EU law. It also plays a key role in EU insurance regulation – application of proportionality is indispensable to allow small and medium-sized undertakings to comply with the complex and often excessively burdensome “Solvency II” regulation. However, the ongoing Solvency II review reveals that the principle is not applied in practice, mostly because of its wide and highly judgmental meaning. As a result, European Insurance and Occupational Pensions Authority (EIOPA) suggested amendments to the current application of the principle that are believed to make proportionality work as intended. The amendments have been adopted by the European Commission in the proposal for a Directive amending Solvency II. The article analyses the proposal and discusses its potential influence on proportionality as a principle and the overall application of Solvency II.

Is artificial intelligence bona fide?
Reflections on the development and trends of disclosure obligations in insurance contracts
K. Malinowska 
British Insurance Law Association’s Journal, Platinum Edition 2022, 19 p.
bila.org.uk

The scope and direction of technological changes raise questions about their impact on the nature of insurance and its principles. This paper aims to assess the impact of new technologies on one of the leading principles of an insurance contract, i.e. the principle of good faith and to determine whether these developments necessitate a change in the approach thereto. It seeks to decide whether the traditional principle of good faith, shaped as an obligation to disclose the risk, should remain only on the insured, or whether it should be adapted to current technological developments as a reciprocal duty of both parties. In this context, the author refers to the differing and often contradictory views of doctrine and case law, proposing a solution consistent with the purpose of the insurance contract, the current tendencies of legislators, the state of technology and the prospect of its development.

Clauses ‘Defining the Risk as a Whole’ and ‘Risk Mitigation’ Clauses under Section 11 of the Insurance Act 2015: The Shifting Tide of Crewing Warranties in Marine Insurance
P. Adamos 
Southampton Student Law Review 12 (2022) 68-103
southampton.ac.uk

As I was investigating the complexities and ambiguities arising out of Section 11 of the Insurance Act 2015, I did realize that the challenge of identifying which term qualifies as a term ‘defining the risk as a whole’ and as a ‘risk-mitigation’ term, calls for an intensive assessment of the purpose of a clause. I did spot such an intensive assessment also in the construction of crewing warranties. The question then arose itself: What if we could construe a warranty, like the one in The Resolute, under Section 11 of the Insurance Act 2015?  This paper tries to envisage a possible answer to this interesting question. After the introduction to the topic under discussion, Chapter 2 refers to the basic characteristics of warranties generally, up to the point of the shift towards the functionality of Section 10 of the Insurance Act 2015. Chapter 3 deals with the construction of crewing warranties prior to the new regime of Section 11, pointing out the rise of the factual matrix as a tool of construction. Chapter 4 is then dedicated to the analysis of the scope and the ambiguities arising out of Section 11. Finally, in Chapter 5 we attempt to dive into the challenging quest of finding the future yardstick of interpretation, which will possibly be applied in construing crewing warranties under Section 11 of the Insurance Act 2015.