Do the Principles of European Insurance Contract Law Go Too Far in Protecting the Policyholder?

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The objective of this article is to analyse the PEICL with respect to the question of whether the policyholder is protected too radically, studying the differences of the PEICL from the regulation of insurance contracts in the Estonian Law of Obligations Act .

One of the purposes of the European Union is a functioning uniform internal market. However, a common market is largely based on contract law. The EU contains 27 different contract laws, making cross-border activity complicated and expensive. The European Commission is about to develop the Common Frame of Reference (hereinafter referred to as the CFR) for European contract law, one part of which is to cover insurance contracts (in the Principles of European Insurance Contract Law —hereinafter referred to as the PEICL ). The 1.7.2010 Green Paper from the European Commission on policy options for progress toward a European contract law for consumers and businesses was presented for public discussion with the aim of consultation concerning the possibilities for further developing the field of European contract law. In its Green Paper, the European Commission in essence proposes seven approaches for improving the coherence of European contract law, including an optional European Contract Law (i.e., the ‘28th regime’ or the ‘second regime’), which would be an optional instrument for consumers and undertakings to apply in their contractual relationships. This optional right would be an alternative to the national contract laws in force. Specialists in European insurance law have found that the 28th regime idea should be guided from within the field of insurance law; a similar conclusion was stated in the European Economic and Social Committee’s opinion on the European Insurance Contract.

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