Summary

As the European Commission wishes to harmonise EU insurance law, the Principles of European Insurance Contract Law (PEICL) are being drafted within the auspices of the Common Frame of Reference (CFR). The draft of the General Part (Part I) and of the provisions common to indemnity insurance (Part 2) were completed on 17 December 2007.

In this article the authors examine the differences relating to the pre-contractual duty of disclosure in the Law of Obligations and the PEICL, and make proposals to amend Estonian law in the light of the PEICL. First, the authors address the pre-contractual duty of the policy-holder, which is not currently harmonised at EU level. The authors then look at the duty of disclosure of insurers as regulated by EU directives. In both cases, focus is on the consequences of breach of the duty of disclosure. The authors examine the right of an insurer to demand the amendment of premiums (i.e. amendment of the contract) where the policy-holder is culpable of failing to disclose information; the duty of the policy-holder to notify the insurer of circumstances of which the insurer is aware; and problems that have arisen in practice in Estonia relating to the duty of insurers to explain the procedures for resolution of disputes arising from insurance contracts and other information prescribed by law to natural persons.