On 28 February 2002, the Parliament
of the Republic of Lithuania amended chapter 2 of the Law on Insurance, which regulated insurance agreements, reinsurance and coinsurance. The provisions of the Law on Insurance stipulate changes in the Insurance Terms and Conditions. It is noteworthy
that all insurance companies shall harmonise the Insurance Terms and Conditions according to the provisions of the new wording of the Law on Insurance
and the Civil Code within 6 months after the amendments come into force.
Insurance companies shall affirm the Insurance Terms and Conditions with State Insurance Supervising Authorities
(SISA) under the procedure established by the Law on Insurance within the abovementioned term either. In case
insurance companies fail to comply with the aforementioned requirement the Board of SISA shall countermand the
licences for the respective insurance
types. According to the new wording
of the Law on Insurance, regulations of insurance agreements and information requirements are stricter than those
contained in a previous version of the law. The new Law also emphasises the protection of the interests of insured. Moreover, conclusion of individual insurance agreements has become
stricter. Article 8 of the Law on Insurance
states mandatory information, which the insurer is obligated to provide in the offer
to a natural person intending to conclude an insurance agreement:
1. Information indicated in paragraph 8 of Article 6.993 of the Civil Code;
2. Applicable law to the insurance agreement; the applicable law offered by an insurance company;
3. Conditions and means for termination of the insurance agreement;
4. Exclusions (non-covered events) and other cases when the insurance company shall have the right to reduce
the claim payment or refuse to pay it.
Moreover, the insurance company has an obligation to inform the insured person on any material change of the
aforementioned information. In case of life insurance, information requirements are stricter and certain additional information shall be provided. If the insured person fails to pay the premium due within the terms indicated in the insurance policy, the insurer is obligated
to notify the insured in writing that after 15 days (in case of life insurance ñ 30 days) from the receipt of the notification by the insured, the obligation of the
insurer to pay the indemnity in case of the insured (covered) event should be suspended if the insurer does not receive the insurance premium. It shall be renewed when the insured pays the premium. In case the insured (covered) event occurs during the suspension period, the insurer shall not be obliged
to pay the indemnity. If the suspension
period lasts more than three months (in case of life insurance ñ more than six
months), the insurer shall be entitled to terminate the insurance agreement unilaterally. Moreover, after such termination of the insurance agreement
the insurer shall be entitled to claim for the premiums unpaid, including the period of suspension of insurance protection, which shall not exceed three
months or in case of life insurance ñ six months. According to the amendments
of chapter 2 of the Law on Insurance the procedure of transfer of the rights and obligations under the insurance
agreement as well as the procedure
of co-insurance is regulated in detail.
The parties of the insurance agreement, which was concluded before the enforcement of the aforementioned amendments . shall not be entitled to
prolong the term of the agreement.
The provision of such agreement establishing that after the termination of the agreement it shall be renewed for the
same term indicated in the agreement shall be considered null and void.