Insurance coverage in Greece
(By Inka Greece)

Wrecks and covers of the insurances: insurances legislation and problems of the European consumers.

INTRODUCTION
The creation of a single market in insurance has been one of the Community's priorities for a long time. Over the last decade, the insurance market has been characterized in all Member States by a steady increase in turnover, reflecting growing demand for this type of product and the increasingly important part played by the insurance sector in the development of economic activity in general.
In accordance with Treaty the internal market in insurance activities comprises an area without internal frontiers in which insurance undertakings are free to carry out their activities.
The objective of the Community activity in this field has been doubled: firstly, to provide all Community citizens with access to the widest possible range of insurance products on offer in the Community, while at the same time guaranteeing them the legal and financial protection required for an insurance transaction; and secondly, to guarantee that an insurance company authorized to operate in any of the Member States can pursue its activities throughout the Community as regards both the right of establishment and the right to supply services.
In order to achieve these objectives, the Community has dealt with life assurance and non-life insurance separately in order to take account of their specific characteristics and the important role which life assurance plays in long-term savings and provident schemes.

I. ASSURANCES INTO THE EUROPEAN LAW
1.The life assurance sector
In 1979 the Council adopted the first coordinating Directive on direct life assurance (Directive 79/267/EEC repealed by Directive 2002/83/EC), the aim of which was to lay down the rules necessary to facilitate the effective exercise of the right of establishment provided for in the Treaty of Rome in respect of such insurance activities. The aim of the second coordinating Directive on life assurance (Directive 90/619/EEC, also repealed by Directive 2002/83/EC) was to facilitate the effective exercise of the right to supply life assurance services.
It laid down two sets of arrangements in respect of freedom to provide services: the first, based on the following strategy: application of the rules of, and supervision by, the Member State of origin of the insurance undertaking or home country control, covers those policy-holders not requiring specific protection arising from the application of the rules of their Member State of residence; the second, which covers other policy-holders requiring such specific protection, is based on the application of the rules of, and supervision by, the Member State in which the service is supplied in order to guarantee that such protection is provided (risk country control).
On 10 November 1992 the Council adopted a third coordinating Directive on direct life assurance. Its aim was to complete the internal market in this form of insurance activity on the basis of the principles of a single administrative licence and supervision of the insurance undertaking's activities by the authorities in the Member State in which that undertaking has its head office.
On 5 November 2002 the European Parliament and the Council finally adopted Directive 2002/83/EC consolidating all the directives in one coherent text.
2.Insurance other than life assurance
In 1973 the Council adopted Directive 73/239/EEC which establishes the appropriate legal framework for exercising freedom of establishment in the Community in respect of direct non-life insurance.
The arrangements necessary to guarantee the effective exercise of freedom to provide non-life insurance services are laid down in Directive 88/357/EEC. This Directive covers all non-life insurance, including compulsory insurance. However, a number of branches or operations are excluded from the provisions of this second Directive on freedom to provide services.
Finally, a third coordinating Directive on direct non-life insurance has been adopted by the Council. This covers the coordination of national rules governing the investment, spread and localization of the assets used to cover technical provisions, the law applicable to insurance supervision, the terms of insurance and the physical inspection of policies and contract documents, access to and pursuit of insurance activities, and supervision according to the principle of home country control.
3.Specific areas
Alongside these major Directives designed to safeguard both the right of establishment and freedom to provide services, the Community has legislated in the following areas: Motor vehicle insurance , annual accounts and consolidated accounts of insurance undertakings, legal protection insurance and credit and surety ship insurance. It has also set up an Insurance Committee to assist the Commission in its task of cooperating with national supervisory authorities in this field.
There is also a Directive on the coordination of laws, regulations and administrative provisions relating to the compulsory winding-up of direct insurance companies .
In order to give supervisory authorities more effective instruments to evaluate the actual solvency of insurance companies that are part of an insurance group, Parliament and the Council have adopted a directive on the additional supervision of insurance companies .
These Community measures, and in particular the third life and non-life Directives, provide the legislative framework for completing the internal market in the insurance sector through the establishment of freedom to provide services to potential policy-holders, who will thus benefit from a wider choice of products at the lowest possible prices thanks to increased competition.
In January 2001 the Commission launched a complaints network for out-of-court settlement (FIN-NET) in the financial services sector. The network is designed to help consumers dissatisfied with a service to find an amicable solution to a problem where the supplier is established in another Member State. This initiative, intended to strengthen customer confidence, is consistent with the Financial Services Action Plan ( FSAP ) and the communication on a new strategy for the services sector in the wake of the Lisbon European Council.
4 Insurance Committee (IC)
On December 19, 1991 the Council adopted the Directive 91/675/EEC setting up an Insurance Committee [Official Journal L 374 of 31.12.1991].
Insurance Committee (IC) is a regulatory and legislative policy body that was created in December 1992 under the Council Directive 91/675/EEC specifically setting up the Committee.
With this directive an Insurance Committee was set in order to assist the Commission in its work in the insurance field with a view to establishing closer cooperation between the national supervisory authorities and the Commission.
The aim of the proposal for a directive (together with some Commission Decisions) was to establish a modern, rational committee structure in the financial services sector which will improve regulatory and prudential cooperation and thus enable the European Union to be more responsive to developments than it was. The package of measures allowed cooperation among supervisory authorities, so strengthening European financial stability.
To simplify and improve the decision-making and implementation in the financial services sector, the European Commission has launched a package of seven measures: a proposal for a Directive (COM/2003/659) and six Commission Decisions. With this package the approach already used in the securities sector would be extended to insurance through the establishment of two new committees:
1) European Insurance and Occupational Pensions Committee (EIOPC with 2004/9/EC) would be set up to replace IC and to assist the Commission in adopting implementing measures for EU Directives; and
2) Committee of European Insurance and Pensions Supervisors (CEIOPS with 2004/6/EC) has been established to act as an independent advisory group on insurance and occupational pensions.

II. THE IMPLEMENTATION OF EU LEGISLATION INTO THE GREEK LAW

1. The Directives of the E.U about insurances

The Community Directives, which have been adopted according to p.d 118/1985, have realized a deep incision in the till then right. They mainly are n.166 of 1972, n.239 and 240 of 1973, n.92 of 1977, n.473 of 1978 and n.267 of 1979 and are referred to the undertaking of activities in the sector of insurance, to the "Community co-insurance" and to the activities of intervening in personal insurance. In August 1996, after a long delay, the adaptation of Greek right in the Directives of b’ generation (freedom of providing services) and c’ generation (unique permission) with the p.d 252/1996 became true. According to the article n.52 of the Treaty of Rome, the restrictions of freedom of installation inside the E.U of individual or legal persons of nationality of a member state are progressively supressed.
However, the achievement of this objective (according to the article 54 of the Treaty) "general program of suppression of restrictions" is worked out and Directives are published, which are worked out by the members - it is about the derivative right of the E.U - that afterwards it should be adopted by national laws. This obligation for our country arises from the Treaty of adhesion in the E.U. The restrictions which are suppressed with the adoption of "Directives" are reported in essential conditions of exercise of various activities, and in this case, the insurance company’s and the mediators’ activities, and they lead to convergence of national legislation as it is necessary for the successful application of the "original" right of the E.U, ( article 52 of the Treaty). That is why we do not talk about unification, but for harmonization (co-ordination) of national laws.

2. The interest of the international and Community legislation in insurance right

Intense is the international character of the insurance economy. In the space of reinsurance, the reason is that the confronting of danger is achieved with the widest possible dissemination internationally. In the space of insurance, the reason is that danger is referred many times to persons, merchandises or other things that travel from country to country. In the frame of European Union, thanks to the capability that today contracting parts have to contract conventions, while the danger or the recipient of the insurance or even the insurer are found in different member states. Thus, the question which arises is that of applicable right, a critical question on the regulation of insurance relation, as the legislation and the jurisprudence continue, even inside the Union, to present deviations.

The l.d 400/1970, according to which private insurance companies function, is directly extended in the operation of insurance convention and indirectly, the entire statute aims mainly at the guarantee of providing of insurer. The statute consists of obligatory law regulations and it provides (article 4) that each insurance which is contracted in Greece is conditioned by that. Also, the Administration has the right to intervene if it realizes or perverseness is denounced, and which has not been undertaken by political courts. This right is intense in consuming insurances.

Regarding all these and with the reserve of what is in effect for insurances about dangers which exist inside the E.U or insurances of persons who are not Greek nationals or nationals of another member state, it is obvious that:

a) When applicable right has not been defined, the right of country of the installation of the insurer who provided the convention will be applied, without following the suiting right, under any conditions.

b) When a foreigner applicable right has been provided, different from the right of the country of installation of the insurer, then we will have to distinguish between consuming insurances and industrial, commercial or professional insurances or in other way insurances, the recipient or the insured person of which have been insured for professional reasons. In the first case the printed term of exclusion of Greek right providing the insurance terms, should not be considered binding for the insured person, which means that only if he wishes his invocation, then it will be applied.

With the progressive completion of freedom of providing services, with which the exercise of insurance is permitted in companies which are not installed here, but in another country of E.U, another dimension of question of applicable right came up. The regulation that is generally accepted as a rule is that the contracting parts should not to have the right of choice but only between the right of member state where the danger is and the state of usual stay of the insured. There is freedom of choice only in the case of insurance of high danger.

However, regarding the insurance conventions that cover dangers and are not found in the territories of member states, the above-mentioned restrictions are not in effect, but those of the Convention of Rome 1980 "about the applicable right in the conventional obligations", that were ratified with the law 1792/1988, are applied. The regulations of this law, few changes have brought to the Greek insurance international right.

Specifically, concerning the personal insurances, only the law of the member state of the insurance obligation is in effect. If the recipient of the insurance usually stays in a State-member other than the country of his nationality, then the contracting parts have the opportunity to choose the right of the member state of their nationality.

3. Protection of consumer (information of the insurance recipient)

The insured person or the insurance recipient who is the consumer, is, according to the Greek Insurance law, him who does not receive the insurance for professional reasons. However, according to the law2251/1994 for protection of consumer, the final recipient of products or services has the attribute of consumer. It is obvious that this significance of law on the protection of consumer, if is exactly interpreted, all insured will have the attribute of consumer. As, however, this is not the aim of law, which would lead to bluntness of protection of consumer with the adjustment of a consumer with a non consumer, but the providing of additional protection only to the final receptor of service, that happens when the insured does not aim to invest in another activity with his insurance, which (other activity) is received for professional reasons. That’s why the (insurance law) is not disharmonized with law 2251/1994, where it is referred to whom makes the insurance for professional reasons, but constitutes a specialization of protection of a special type of consumer (insured).

Of fundamental importance is the regulation of art. 33 par.1 of Insurance Law that renders “semi obligatory” right of all law regulations, with the significance that, if something else is not defined, specifically in the Ins. Law, with the insurance convention the rights of the recipient of insurance cannot be limited, but extended.

Apart from the general regulations on the protection of consumer, which are also applied to the insured person and which are focused mainly on the abusive and consequently invalid terms, that the without negotiation general terms of transactions of supplier (as the insurance ones)include, as it was mentioned before, special regulations that concern the protection only of the insured person only and in particular without discrimination if he is a consumer or not. These special regulations are mainly focused on issues briefing of the insured consumer.

A line of obligations is provided, as:

1. Information of the insured before the contract of the convention that concerns the applicable right in the convention.
2. The member state of the E.U, where the insurer is seated.
3. The insurance contract should be written in Greek, when the insurance is obligatory or does not concern high dangers.
4. The covers, the duration of convention, the way of denunciation, the determination of value of insurance repurchase must be described in the personal insurances.
5. Information about the type of units of investments, when the
insurance that is to be contracted is connected with such units, should be given.
6. The way of exercise of right of retraction etc should be mentioned.

The above-mentioned information that, noteworthy, should be given during the convention, do not concern nevertheless, only insurances of high dangers. As we said, in the questions of information, the discrimination between insurance that is contracted for professional reasons and insurance that is contracted for private reasons does not exist. However, most information, as well as the obligation to provide the right of retraction by the convention to the insured, concerns personal insurances, which after all concern the insured-consumer. Thus, for some time, from the beginning of the convention, the particular rights of information of the insured which were introduced by the Directives of the E.U, to which our legislation was adapted, we can say that they also belong to the area of protection of consumer.

The general and special regulations of protection of the insured-consumer and information of the insured in generally, concern the reinforcement of his position as a contracting part in the insurance convention, and do not concern his protection against insolvency of the insurer. This last one is achieved thanks to a line of regulations which are provided by the Greek and European legislation of supervising insurance companies. The solvency of insurance promise is government’s responsibility towards all people insured who either has the attribute of consumer or not.

4. The drawing of directive of Council of Ministers of E.U on insurance convention

Member states of the E.U have been trying to coordinate the regulations about insurance convention (common principles should be adopted) which concern mass insurances (no high industrial or commercial dangers). The efforts are accomplished in the drawing of Directive, so that the main directions are final, if in the end the Directive becomes true.

The drawing of Directive will not coordinate the regulations of common conventional right that additionally regulate each insurance convention, but only the fundamental special regulations of insurance convention. The drawing of Directive is the upshot of a long scientific experience, that was formed relatively freely, without perceptible political compromises. As it was mentioned above, the Ins. Law has been harmonized with the drawing of Directive and thus, appreciable changes will not happen when the drawing of Directive is adopted.

We can say that the philosophy of drawing of Directive is the improvement of the position of the insured, the effort of not easy interruption of "situation of insurance", the introducing of system of limited providing, which is the restriction of the inflexible rule "it is either owed to complete insurance compensation or nothing" and finally the importance that is given to the wretched behavior and the differentiation of confrontation by simple guilty, thing that valorizes the convention of insurance as convention that is mainly conditioned by good faith.

5. The completion of freedom of providing services

With the adoption of Directive 88/357 and Directive 90/619 of the Council of E.U (the so called b’ generation directives), according to the articles 59 of the Treaty of Rome, the freedom of providing services in all sectors of insurances against damage was established.
With the completion of this freedom, the in E.U insurance companies do not need any more, in order to work in another member state, different installation, that means they should have been installed (with agency or branch).

However, this completion is different, depending on high or low dangers. Concerning the last ones, the freedom of providing is completed under several conditions that, even if they are not assimilated with the process of installation, all considerably abstain to characterize the Community as a single area of such dangers.

As we mentioned before, from 1/7/1994 there have been placed in force the so called directives of c generation (92/49 and 92/96) to which the Greek right was adapted with the p.d 252/1996, according to which the authorization for works which are granted by the member state, is in effect for all the Community (single authorization). According to the same statute, the freedom of providing services is generalized for all kinds of danger and the significance of protection of public is introduced. Against this significance, the cover of danger or the undertaking of insurance obligations cannot be an obstacle.

6. Collaboration of European Authorities of supervising insurance companies

The co-ordination of regulations that determine with a single way the conditions of installation of an insurance company in the area of the E.U, and with which the Community Authorities of freedom of installation and that of providing services were completed, has moved a part of supervising insurance companies which have been working in Greece by the Greek supervisory Authorities to supervisory Authorities of other countries inside the E.U and has imposed a narrow collaboration between Community supervisory Authorities.

Thus, Greek supervisory Authorities should give information to the corresponding Authorities of the member state of E.U where the insurance company is seated which has been installed in Greece, regarding the situation of solvency of the company.

They have the same obligation for no Community companies which are installed in another State-member. The collaboration is extended, mainly, in the frame of process of installation and exercise of work without the installation of Community insurance companies, retraction of authorization, transport of portfolio, application of program of financial reconstruction, short-term financing, restrictive measures in case of weakness of constitution of margin of solvency and guaranteeing capital and free providing of services.

SOURCES OF GREEK LAW ABOUT PRIVATE INSURANCE COMPANIES
1. l.d 400/1970 "About private insurance companies", as it is in effect.
2. p.d. 118/1985 "Conformity of legislation according to the regulations of Directives that concern the undertaking of insurances, included also life insurances, in the Community co-insurance and in the measures related to the activities of the agent and the broker of insurances".
3. Law 2170/1993 "Modification of l.d 400/70 and other regulations" and law 1380/1983 "modification and completion of regulations about private insurance companies".
4. The p.d 252/l996, adaptation in Directives 28/357, 90/618, 90/619 (free providing services), 92/49, 92/96 (unique permission), 91/674 (unified accounts of insurance companies) etc
5. l.d 551JJ970 "about private insurance companies of boats and planes".
6. Law 2496JJ997 "Insurance convention, modification of insurance legislation about private insurance and other regulations"
7. Law. 1569II985 "mediation in the conventions of private insurance, constitution of association of special experts of road accidents, operation of international insurance bureaus and other regulations".
8. The p.d 103/l990, Adaptation in Directive 84/641 on tourist help.
9. The p.d 459/l990, Adaptation in Directive 87/344 on the insurance of legal protection.
10. p.d 298II986 "rights and obligations of insurance agents, producers etc."
11. Law 2190/1920 "about anonymous companies", as it is in effect.
12. Ministerial decisions 85538/7254, 85539/7253 and 20956 /.7958 "about the way of calculation of reserves of insurance companies".
13. Ministerial decision K43961/1986 "about determination of insurance supplies".