When research and development of a new type of insurance fails or insurance products priced low at the time of marketing become unprofitable thereafter, insurers are inclined to amend conditions repeatedly, raise premiums or close down the insurance portfolio by referring to extensive and unspecified insurance conditions. However, these remedies are not necessarily available under the Insurance Contracts Act.
Unprofitability has been an issue with cancer insurance products introduced in Finland in the late 2000s. Amendments to cancer insurance conditions and premiums and the insurers’ terminations of the insurances resulted in multiple recommended decisions of the Insurance Complaints Board in 2014. The board’s recommendations serve as a reminder that insurers cannot amend insurance contracts or terminate unprofitable contracts if they do not draft the conditions carefully at the outset and fulfil their duty to inform when marketing their products.
Partner Matti Komonen from HPP Attorneys Ltd has written an update on the cancer insurance policy amendments and terminations and the Insurance Complaints Board recommendations. The update titled “Insurer’s right to terminate cancer issue” has been published in the International Law Office’s newsletter.