CJEU Judgment In Relation To Unfair Terms In Group Insurance Contracts

The Court of Justice of the European Union (CJEU) recently delivered a judgment (available here) in relation to unfair terms in group insurance policies. The judgment will serve as a warning to insurers and policyholders of group insurance policies, as they must make sure that consumers who are covered by the policy are notified of all exclusions and limitations prior to conclusion of the contract.

The underlying proceedings were a case in the Portuguese courts between Ocidental-Companhia Portuguesa de Seguros de Vida SA (Ocidental) and LP, a consumer. LP had taken out a loan with a bank and alleged that she was required by the bank to become party to an Ocidental group insurance contract (with the bank as policyholder) for payment protection insurance. If LP became permanently incapacitated, Ocidental would repay the loan.