WHAT CLAUSE IN INSURANCE?

WHAT CLAUSE IN INSURANCE?

The arbitration clause is a clause that is set to insurance contracts, which undergoes any difference or discrepancy arising between the insured, contracting or beneficiary and the insurance company.

The arbitration clause is also a stipulation of the insurance that is usually included in the reinsurance treaties to resolve possible differences that may arise between insurer and reinsurer in regards to the interpretation of the terms. But this is something which, as policyholders, not interested, since it is a problem that has to be resolved between professionals.

In any case, the arbitration refers to the differences between the parties regarding the interpretation, application, compliance or non-compliance with or on any compensation or obligation relating to the contract.

In this way, in case of discrepancy of criteria, each party appoints an arbitrator, as well as a third party chosen by both. Among the three and most will take a decision, which is binding and, therefore, required compliance.

CAN THE INSURANCE COMPANY REFUSE ARBITRATION?

No. If an insured person requests an arbitration to clarify any discrepancies, the insurer is obliged to admit it pursuant to article 76 of the law of contract of insurance.

The insured shall have the right to refer to arbitration any difference that may arise between him and the insurer on the insurance contract.

Arbitration is the right of the insured, and not need consent of the insurer, which cannot be denied. In fact, the demand for arbitration arises in a manner very similar to as presents a normal demand.

It should be noted at this point that the insurance contract Act requires, according to the dictates of the mandate of the community, 87/344/EEC, directive of 22 June 1987 on the coordination of the d laws, regulations and administration relating to the legal expenses insurance, to which insurance policies both stating that Faculty of the insured as the designate freely Attorney and paralegal. In this sense, the article the LCS 76f says:

The contract of legal expenses insurance policy shall collect expressly the rights granted to the insured by the two previous articles.

In the event of a conflict of interests or disagreement about how to treat a litigation matter, the insurer shall immediately inform the insured of the faculty who has the authority to exercise rights here referred to the two previous articles

On the other hand, article 6 of the directive community, 87/344/EEC, of 22 June 1987 States the following:

Member States shall take all useful measures in order that, without prejudice to any right of appeal to a court which had eventually provided for national law, is intended to be an arbitration or other procedure offering comparable guarantees of objectivity, allowing to decide, in case of divergence of views between the legal expenses insurer and his insured with respect to the attitude to be adopted for the resolution of the disagreement.

The insurance contract shall mention the right of the insured to resort to such a procedure.

It is clear then that the insured is within their rights of recourse to arbitration if you have any discrepancies with the insurance company. However, it is always better to try to solve the differences through friendly.