Transparency in the Insurance Contract Law of the Western Balkans

Slavnić and Jovanović (2008), pp. 26–48.

Slavnić and Filipović (2015), pp. 286–290.

Nikolić (2010), pp. 339–344.

Sava Tekelija was the first Serbian who attained PhD in Law at the University of Pest. He was an ethnic Serbian but subject of the Austrian Empire and member of Austrian noble family, of Serbian descent—Tekelija.

The constitution was subject to approval of the Ottoman government in Istanbul, and was deemed as “too liberal” at the time, both from the representatives of Austria and Russia, as well as from Ottomans.

According to professor Nikolić (2010), only Bavaria—Codex Maximilianeus bavaricus civilis (1756), France—Code civil des Français (1804), Austria—Allgemeine bürgerliche Gesetzbuch (1811), and Netherland—Burgerlijk Wetboek (1838), had enacted Civil Codifications before Serbia.

Antonijević (1974), p. 11.

The first insurance contract in Belgrade was concluded in 1839. A judge of the Appellate Court, Lazar Zuban, insured his house against fire. Acting on behalf of the insurer, the Trieste Insurance Company “Assicurazioni Generali Austro-Italiche” was agent Vasilije Vasiljević, a renowned trader from Zemun. As a curiosity, we will add that several days after the conclusion of the fire insurance contract, covering the house of the judge in Savamala, the house burned down and the agent paid off the insured sum of 175 thalers. See: Petrović et al. (2013), pp. 68–69.

Bartoš et al. (1974), pp. 11–13, also Stojan Radčević Ristić, a former district governor and retired insurance company inspector wrote an interesting book on his retirement entitled “Guidelines for the protection of the policyholders and those who are offered life and property insurance”. Without doubt, in his long experience as insurance inspector and district governor he encountered many situations where policyholders were misinformed if not outright cheated in their dealings with insurance companies. The author was writing in length about dishonest and unfair actions by the insurance companies, representatives, agents, and sellers. His suggestions to the reader is that when the agent starts presenting benefits of insurance, or when he makes an offer of insurance contract, one should: (1) review the certification of an agent or seller and his authorization, above all to collect money; (2) the agent should be asked to disclose general and specific terms and conditions for specific insurance he offers, conditions should be studied thoroughly, even asking the agent to come back tomorrow so one could study the conditions properly; (3) the agent should not be allowed to complete the offer himself, but it should be done rather by either future insured or someone he trusts; (4) advance payments should not be made regardless of the type of insurance offered as one of the methods to ensure that insurance business will be reliable; The author also pointed out that one of the prevailing problems of insurance industry that must be solved is the compensation schemes of the insurance agents. “As long as agents are charged with a salary, a commission, travel, and other expenses under the current account, obliged to the monthly activities they may be tempted to deceive policyholders who are still unskilled”. Further, he notices that some of the agents dared not to return to the places where they committed deceptions and machinations for personal financial benefits. We may notice that the problem he pointed out some 80 years ago is still a point of debate in insurance law. Insurance Distribution Directive in Article 17(3) as a general principle prescribes that: “In particular, an insurance distributor shall not make any arrangement by way of remuneration, sales targets or otherwise that could provide an incentive to itself or its employees to recommend a particular insurance product to a customer when the insurance distributor could offer a different insurance product which would better meet the customer’s needs.” The problem of whether the new Insurance Distribution Directive should attempt to ban commission-based remuneration of intermediaries/distributors was one of the most hotly debated topics in the process of drafting the new Directive.

Karanikić et al. (2012), pp. 68–70.

Article 897 of the Serbian Law of Obligations, Article 994 of the Law of Obligations of Montenegro, Article 897 of the Law of Obligations of FBiH and Republika Srpska.

Benjamin (2010), p. 792.

Šulejić (2005), pp. 50–51.

Article 900(2) of the Serbian Law of Obligations, Article 997 of the Law of Obligations of Montenegro, Article 900 of the Law of Obligations of FBiH and Republika Srpska.

Jankovec (1980), p. 775.

Vs. BiH, Rev. 629/83.

Article 918 of the Serbian Law of Obligations, same as Article 1015 of the Law of Obligations of Montenegro.

Šulejić (2005), p. 114.

Jankovec (1980), p. 820.

Petrović (2015), pp. 235–236.

Article 907 of the Serbian Law of Obligations, Article 1004 of the Law of Obligations of Montenegro, Article 907 of the Law of Obligations of FBiH and Republika Srpska.

Article 908 of the Serbian Law of Obligations, Article 1005 of the Law of Obligations of Montenegro, Article 908 of the Law of Obligations of FBiH and Republika Srpska.

Jankovec (1980), p. 798.

Ibid 800.

It was recognized that there is a gap in situation where the insured intentionally omits information that are not substantial do the decision of the insurer to conclude the contract, as Article 908 deals only with intentional misrepresentation of information substantial for the decision of the insurer. In this case, Article 909 should apply notwithstanding that it deals only with unintentional omission of information.

Article 911 the Serbian Law of Obligations, Article 1008 of the Law of Obligations of Montenegro, Article 911 of the Law of Obligations of FBiH and Republika Srpska.

Jankovec (1980), p. 803.

Article 902(2) of the Serbian Law of Obligations, Article 999 of the Law of Obligations of Montenegro, Article 902 of the Law of Obligations of FBiH and Republika Srpska.

Jankovec (1980), p. 784.

Šulejić (2005), pp. 216–217.

Ibid.

Article 268 of the Serbian Law of Obligations, Article 275 of the Law of Obligations of Montenegro, Article 269 of the Law of Obligations of FBiH and Republika Srpska.

Petrović (2015), p. 190.

Article 100 of the Serbian Law of Obligations, same as Article 98 of the Law of Obligations of Montenegro, Article 100 of the Law of Obligations of FBiH and Republika Srpska.

Petrović (2015), p. 298.

Article 143 (2) of the Serbian Law of Obligations, Article 138(2) of the Law of Obligations of Montenegro, Article 143(2) of the Law of Obligations of FBiH and Republika Srpska.

Petrović (2015), p. 368.

As an illustration of the principle of protection of the buyer/weaker party that appears as an overarching principle in the law, we may point out the provisions that regulate sales paid by installments. The document witnessing the contract, under threat of nullity, must include a clause authorizing the buyer to repudiate the contract if he notifies the seller accordingly in writing, within a three day time limit from the day of signing the document, and that the buyer cannot renounce such right in advance. This provision essentially grants the buyer a cooling off period of 3 days after the conclusion of contract. This rule does not exist as a general principle either in Insurance Law or in the Consumer Protection Law. However, it exists for this particular case in the sale of goods in the Law of Obligations.

Petrović (2015), p. 232.

Antić (2008), p. 39.

Stojanović (1980), p. 109.

Ibid.

Antić (2012), pp. 8–9.

Stojanović (1980), p. 110.

Hesselink (1995), p. 198.

Insurance is Serbia is dominated by non-life insurance, which makes up 77% of the market. Almost one third of the premiums are premiums from mandatory motor vehicle liability insurance. Report from the National Bank of Serbia for 2016.

Tereszkiewicz (2016), p. 171.

Article 404 CG, Article 395 of the Serbian Law of Obligations, same as Article 303 of the Law of Obligations of Montenegro.

Article 12 of the Serbian Law of Obligations.

Article 15 of the Serbian Law of Obligations.

Article 13 of the Serbian Law of Obligations.

Article 16 of the Serbian Law of Obligations.

Article 17 of the Serbian Law of Obligations.

Expert witness findings in Case ПЖ 2743/2016.

Obradović (2016), pp. 105–106.

Despite the fact that some claimants asked for nullity of the contracts and the courts sided with them, we are still waiting for the appellate court decision on this stance, as opposed almost a uniform rule emerged that appellate courts required lower courts to grant the repudiation of the contract when clients filed the claim. Additionally, even the Supreme Court delivered an opinion on the matter of unilateral increase of interest rates in accordance with the banks “business policy”, ruling them illegal. Рев 1282/2015.

ПЖ 2237/2016, ПЖ 3826/15, ПЖ 924/15, ГЖ 1781/16.

Article 133(1) of the Serbian Law of Obligations.

Slijepčević (2016), p. 5.

Slavnić (2012), pp. 27–29; Slavnić (2016), pp. 67–95.

Article 4 of the Draft of the Civil Code.

Article 10 of the Draft of the Civil Code.

Article 1395 of the Draft of the Civil Code. This article was changed after critical review on one of AIDA Serbia conferences. In the original draft, the only person who could rely on “most favorable” interpretation was the negotiator of insurance; neither policyholder nor beneficiaries were included in original draft. For more details see: Slavnić Jovan, “New areas and rules of contract interpretation in favour of one contract party in the insurance contract – contribution to the consultation on insurance contract regulation in the Draft Civil Code of Serbia”, Modern Insurance Law current trends and issues, XV conference of AIDA Serbia.

Article 1396 of the Draft of the Civil Code.

Article 1397 of the Draft of the Civil Code.

Article 1414 of the Draft of the Civil Code.

Article 1413 of the Draft of the Civil Code.

Slavnić (2012), pp. 33–34.

Weatherill (2013), p. 92.

Petrović (2015), p. 190.

Article 82, Insurance Law of Serbia.

Golubović et al. (2015), p. 135.

Article 265 of the Insurance Law of Serbia.

Golubović et al. (2015), p. 135.

Article 15 of the Insurance Law of Serbia.

Article 81d of the Insurance Law of Montenegro.

Article 81 c Insurance Law of Montenegro.

Article 15 Insurance Law of Montenegro.

Article 196 Insurance Law of Montenegro.

Article 23 Insurance Law of Republika Srpska.

Article 216 of the Insurance Law of FBiH.

Mekšić (2010), pp. 420–421.

The Law defines customer (literal translation would be user of financial service) as natural persons, narrowing the scope of application. Article 2 (9).

Article 2 (1) Consumer Protection Law of Serbia.

Petrović (2015), p. 124.

Ibid, 125.

Karanikić (2012), p. 84.

Article 43 of the Consumer Protection Law of Serbia.

Literal translation would be “publicity demand”.

Petrović (2015), p. 371.

Ibid, 372.

Article 17 and 18 of the Consumer Protection Law of Serbia.

Đurović (2013), pp. 180–185.

Article 93 (4) of the Consumer Protection Law of Federation of Bosnia & Herzegovina.

Article 95 (b) of the Consumer Protection Law of Federation of Bosnia & Herzegovina.

Article 106 of the Consumer Protection Law of Montenegro.

Slavnić (2014a, b), pp. 439–441.

Ibid.

Petrović (2015), p. 284.

Ibid. 302.

Ibid.

Ibid. 286.

Ibid. 289.

Petrović (2013), p. 141.

Wandt (2012), pp. 10–12.

Opšta preporuka 06-603-4/10. From 31.12.2010. available at http://​www.​azors.​rs.​ba/​azors/​lat/​pod_​akti/​ombudsman/​Peporuka_​ugovaranje.​pdf.

The law in general was deemed to provide decent level of consumer protection if considered as a general contract law, outside of the context of particular Consumer Legislation, Karanikić (2012), p. 70.