Project Group "Restatement of European Insurance Contract Law"

The term "to restate" is defined as "to express again or differently, especially more clearly or convincingly" (Hawkins and Allen (eds.), The Oxford Encyclopedia English Dictionary [1992]). "Restatements of the Law" are produced in the USA by the American Law Institute in order to gain principles of law common to all States.

The Project Group "Restatement of European Insurance Contract Law" follows the same idea concerning the insurance laws of the EU Member States. However, its task goes beyond a Restatement: a European Insurance Contract Act serving the interests of an internal market will be drafted.

The Restatement shall be structured as follows: parts, chapters, sections, and articles. Each article is followed by comments and notes, according to the model by Lando and Beale (eds.), Principles of European Contract Law, Parts I & II [1999]. Articles (including comments and notes) are drafted by different members of the Project Group, presented and discussed at the workshops of the Group and finally accepted by the Group. A Drafting Committee revises language, structure and formal aspects of the texts.

The "Restatement of European Insurance Contract Law" focuses on mandatory (semi-mandatory) law. Legal literature clearly indicates that the (semi-) mandatory rules form a barrier to the functioning of the internal insurance market and, therefore, require unification.

In the same time it must be kept in mind that the "living law" of the insurance contract is not statutory in character but is embodied in general contract terms. The essential task of the legislator in the field of insurance contract law is not to regulate insurance products in detail but to set a mandatory frame for the design, marketing and administration of insurance products by the insurance industry. Such mandatory frame is required for reasons of public policy as well as protecting the policyholder, the insured and other interested third parties.

As to the scope of application of mandatory (semi-mandatory) law, the Restatement follows the delimitation standards of the second and third generation of EC Directives on Insurance which have established cogent minimum rules for party autonomy in international insurance contract law. In short, mass risks are governed by the mandatory rules, whereas parties to insurances of large risks may agree on terms deviating from the provisions of the Restatement.

The work undertaken is academic in character. The Draft promotes knowledge of (comparative) insurance contract law and provides teaching aids. It will also set a Common Frame of Reference of Insurance Contract Law in the EU.

Moreover, the Restatement serves as a Model Law for the European and/or the national legislator.

It may also be used by the insurance industry in the course of developing (European) insurance contract terms. Finally, arbitrators may consider the Restatement in their awards.

Read also more on the relationship between the Restatement Group and the European Union.