Insurance laws Austria
In Austria, insurance is governed by a comprehensive legal framework that is both national and influenced by European Union directives. The primary laws regulating the insurance sector cover the supervision of insurers, the contracts between insurers and policyholders, and specific types of mandatory insurance.
Key Legislation and Regulatory Body
Financial Market Authority (FMA): The FMA is the independent and integrated financial regulatory authority in Austria. It is responsible for the supervision of all insurance entities operating within the country, including life, non-life, and reinsurance companies. The FMA ensures compliance with Austrian and European Union regulations, such as the EU Solvency II Directive.
Austrian Insurance Contract Act (VersVG): This is the most important piece of substantive law governing the relationship between the insurer and the policyholder. It outlines general contractual regulations and specific provisions for various types of insurance. The VersVG is supplemented by the Austrian Consumer Protection Act (KSchG), which provides additional protections for consumers, particularly regarding unfair contract terms.
Austrian Insurance Supervision Act 2016 (VAG 2016): This law incorporates the EU Solvency II Directive and sets the requirements for obtaining licenses and mandates compliance with corporate governance, commercial, and anti-money laundering regulations for insurance companies.
Austrian Trade Regulation Act (GewO): This act regulates insurance intermediaries, such as brokers and agents, who must obtain a license from the relevant trade authority.
Mandatory Insurance
Austria has a strong system of compulsory insurance, with certain types of coverage being legally required for individuals and businesses.
Social Insurance: This is a cornerstone of the Austrian system and is mandatory for all employed and most self-employed persons. It is a comprehensive scheme that includes three main components:
Health Insurance: This provides coverage for medical care, including doctor visits, hospital stays, and medication. The system is largely publicly funded and automatic for employees, with contributions deducted from their income.
Pension Insurance: This is part of the social security system and provides old-age pensions.
Accident Insurance: This covers injuries and illnesses that occur in the workplace.
Motor Third-Party Liability Insurance: This is mandatory for all vehicle owners and covers damages caused to third parties in an accident.
Aviation Third-Party Liability Insurance: This is required for aviation activities.
Professional Indemnity Insurance: This is compulsory for certain regulated professions to cover potential financial losses resulting from professional negligence.
Other Important Aspects
Consumer Protection: Austrian insurance law, particularly the Consumer Protection Act, includes specific provisions to protect policyholders. Clauses in contracts that are deemed unfair or violate the "black list" of prohibited terms can be considered void.
Dispute Resolution: In case of a dispute, policyholders can file an out-of-court claim with the insurer. If the claim is rejected, they have a specific period (usually one to three years, depending on the type of rejection) to file a court action. The competent court is determined by the amount in dispute.
Market Regulation: The FMA, in collaboration with European supervisory authorities, monitors the Austrian insurance market to ensure financial stability and consumer protection. It oversees the conduct of insurers, their products, and capital requirements.
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