Transparency Of Austrian Cost Agreements In Endowment Policies: Where To From Here?

In 2007/2008, the Austrian Supreme Court dealt with the lack of transparency of cost agreements in "old" endowment life insurance policies concluded before 2006.

Because the issue was raised in collective proceedings, the consequences for individual proceedings were not addressed. Nor did the court address how a gap created by the lack of transparency, if any, should be filled.

What does the law say?

Article 5 of Directive 93/13/EEC stipulates the requirement for transparency of terms: "In the case of contracts where all or certain terms offered to the consumer are in writing, these terms must always be drafted in plain, intelligible language."

While Article 6 of Directive 93/13/EEC provides that unfair terms are not binding on the consumer, the legal consequences of terms that lack transparency are determined exclusively by national law. Therefore, the increasingly strict case law of the European Court of Justice ("ECJ") on unfair terms (see ECJ C-229/19 –