[INSURANCE LAW / COMPLIANCE] Electronic termination of insurance contracts: technical details finally published
A decree published on March 16 specifies the terms and conditions for electronic cancellation of insurance contracts, following the law of August 16, 2022, one of the aims of which is to facilitate the online cancellation of insurance contracts.
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The details of the new legal electronic cancellation system have just been defined in the decree published on March 16, 2023, to come into force on June 1.
This is a major undertaking, and insurers have no room for maneuver in implementing this new 3-stage system:
1) Notification of cancellation, including identification of the policyholder and contract, reminder of cancellation conditions and consequences…)
2) A summary of the cancellation request for checking and possible rectification
3) Confirmation of cancellation by the person concerned.
This new system will apply to all types of insurance contract, whether or not taken out online, as long as the insurance company, mutual insurer or provident institution, whatever its form, offers its customers the option of online subscription or membership.
A strictly regulated system for electronic cancellation of insurance contracts
Decree no. 2023-182, published on March 16, 2023, sets out the terms and conditions for electronic cancellation of insurance contracts. The decree implements article 17 of the law of August 16, 2022 n° 2022-1158, which modified article L113-14 of the French Insurance Code.
This measure will apply to all types of insurance contract, whether or not they have been concluded electronically, as long as the insurer offers contract subscription via its website.
This is a major undertaking for insurers, who will have to provide a clear, easy-to-use cancellation function on their website.
Insurers have no room for maneuver when it comes to the system to be set up, which must include the following 3 steps:
1) A “Cancel your contract” function (or a similar, but unambiguous, formula) providing a general reminder of the cancellation conditions, the notice period, if any, and the consequences of cancellation for the policyholder. The information to be provided to the insurer is limited to a specific list. It includes information identifying the subscriber and the contract, the reason for cancellation and the date of the event giving rise to cancellation;
2) A summary of the cancellation request to enable prior verification by the subscriber or member, and to enable modifications to be made;
3) Activation of an unambiguous “confirm my cancellation request” or similar function to confirm the cancellation.
This new system will come into force on June 1, and is incorporated into new articles depending on the sector concerned: D113-7 Code des Assurances, D221-1 Code de la mutualité, D932-6 Code de la sécurité sociale.