Based on recommendations of the Insurance Ombudsman – which frequently receives complaints about late payment of life insurance contracts – a recent law was adopted to set the time frame within which payments due under life insurance contracts are to be made.
These new legislative requirements only cover life insurance contracts of a policyholder resident in Belgium.
Insurers active in the life insurance sector are now required to communicate in writing to the beneficiary of a life insurance policy a list of documents and information needed to make an insurance payment. Such documents and information must be reasonable and relevant, and should not include any documents or information that the insurers have already requested from beneficiaries or third parties.
The list must be communicated by the insurer within two weeks of the insurer receiving a request for payment under the life insurance policy. However, this two-week period will be suspended if the insurer does not have sufficient data to identify or locate one or more beneficiaries. The insurers must take all reasonable steps to obtain such data as soon as possible, after which the initial period resumes. The insurers must be able to demonstrate the reason for suspending the time limit. If the documents and information received by the insurer are not satisfactory, the insurer may request additional information within one month.
Once all the necessary documents and information have been provided, the insurer is obliged to pay the insurance benefit within one month. However, this period will be suspended if payment cannot be made for reasons beyond the insurer’s control. The period will resume when the relevant issues have been resolved. The reasons for the suspension must be documented.
Late payment interest will apply to the insurer in case of failure to comply with the time limits set out above.
It should be noted that insurers have a right of recourse against insurance agents or brokers acting in the capacity of agents of the insurer when the late payment is caused by such agents.