Publication date: 11.07.2024
Liability for violation of the rules for the provision of insurance services
Insurance services play an important role in ensuring financial stability and protecting the interests of individuals and legal entities. High-quality and reliable insurance is an essential element of modern society. However, violations of the rules for providing insurance services can have serious consequences for both consumers and insurance companies. In this article, we will consider the main aspects of liability for violation of the insurance services rules, the regulatory framework, types of liability and the procedure for bringing to liability.
Legal and regulatory framework
The provision of insurance services in Ukraine is regulated by several key legal acts:
TheLaw of Ukraine "On Insurance":
- The main law regulating the activities of insurance companies sets out requirements for the organisation and conduct of insurance operations, the rights and obligations of insurers and policyholders, and liability for violations of the law in this area.
TheLaw of Ukraine "On Financial Services and State Regulation of Financial Services Markets":
- Defines the legal framework for the provision of financial services, including insurance services, establishes requirements for financial institutions, the procedure for licensing and control over their activities.
Law of Ukraine "On Protection of Consumer Rights":
- Defines the legal framework for the protection of consumer rights in insurance services, establishes consumer rights, insurers' obligations and the procedure for handling consumer complaints.
Civil Code of Ukraine (CCU):
- Regulates contractual relations between policyholders and insurers, defines the rights and obligations of the parties, and mechanisms for consumer protection.
Code of Ukraine on Administrative Offences (CUAO):
- Provides for administrative liability for violation of the requirements of the legislation on insurance services, non-compliance with standards and rules of activity in financial markets.
Criminal Code of Ukraine (CCU):
- Establishes criminal liability for crimes in the field of insurance services, including fraud, misrepresentation of policyholders and other offences.
National Commission for the State Regulation of Financial Services Markets (Natskomfinposlug):
- The regulatory authority that supervises and controls the activities of insurance market participants, establishes regulations, regulates insurance activities and imposes sanctions for violations of the law.
Major violations of the rules for the provision of insurance services
The main violations of the rules for the provision of insurance services may include:
Illegal activities:
- Provision of insurance services without an appropriate licence or permit, which is a violation of the law and is subject to administrative or criminal liability.
Failure to complywith information disclosure requirements:
- Failure to provide or provide inaccurate, incomplete or false information about insurance services, contract terms, risks, etc.
Fraud and abuse:
- The use of unfair methods to gain profit, including manipulation of information, misappropriation of policyholder funds, etc.
Conflict of interest:
- Failure to disclose a conflict of interest that may affect the policyholder's decision or use of confidential information for personal gain.
Failure to comply with therequirements for payment of insurance claims:
- Delaying or refusing to pay insurance claims without proper grounds, violating the terms of the insurance contract.
Violation ofconsumer rights:
- Failure to comply with the terms of the insurance contract, failure to provide or delay in the provision of services, unlawful charging of commissions and other actions that violate the rights of policyholders.
Types of liability for breach of insurance services rules
Violations of the rules for the provision of insurance services may result in various types of liability: administrative, civil and criminal.
Administrative liability:
- Administrative liability is incurred for violations of the requirements of the insurance services legislation, non-compliance with standards and rules of operation. Sanctions may include fines, warnings, and temporary suspension of the insurer's activities. Such violations are subject to fines ranging from 10 to 200 tax-free minimum incomes, and in case of repeated violations - up to 500 tax-free minimum incomes.
Civil liability:
- Civil liability is incurred in the event of material or moral damage to the insured as a result of improper provision of insurance services. Insureds have the right to seek compensation through the courts. Liability may include compensation for pecuniary damage (lost money, lost profits, etc.) and non-pecuniary damage (psychological stress, humiliation).
Criminal liability:
- Criminal liability is incurred for committing crimes in the insurance services sector, such as fraud, misleading policyholders, which have led to serious consequences for the financial condition of policyholders or the economy. Sanctions may include fines, imprisonment, and a ban on engaging in certain activities. Such violations are punishable by fines in the amount of 500 to 2,000 tax-free minimum incomes or imprisonment for up to 10 years.
Procedure for bringing to liability
The procedure for holding insurance companies and their employees liable for violations of the rules for the provision of insurance services depends on the type of violation and the form of liability:
Administrative procedure:
- Administrative offences can be detected during inspections by regulatory authorities (National Financial Services Commission, State Financial Monitoring Service) or following complaints from policyholders. If violations are detected, an administrative report is drawn up and reviewed by the competent authority. After reviewing the protocol, a decision is made to impose administrative sanctions.
Civil procedure:
- In the event of material or moral damage, insureds may file a claim for compensation in court. The court examines evidence of improper provision of insurance services, hears witnesses, and conducts expert examinations to determine the amount of damage. The court decides on the compensation of losses.
Criminal procedure:
- In the event of a crime in the insurance sector, victims or other interested parties may file a complaint with law enforcement authorities. Law enforcement agencies conduct investigations, collect evidence, and question witnesses and suspects. If the fact of a crime is established, the case is referred to the court for consideration. Legal marketplace "CONSULTANT" will help you solve any problem! All the necessary services at any time: analysis of documents, legal analysis of the situation, legal analysis of the situation, written advice, verification of documents by a lawyer, legal analysis of documents, legal opinion of a lawyer, legal opinion of a lawyer, legal analysis. Are you looking for an online lawyer or a lawyer online? Choose CONSULTANT - a lawyer is always at your side!
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