Title 1: The Insurance Relationship

The insurance relationship is governed by the Insurance Code and all the texts that have
supplemented it.
The Code was promulgated by the Act of 9 March 1992. It entered into force on 1 January
1993.
The code has made it possible to bring together all the texts that govern the subject.
Codification has made it possible to protect the rights of insured persons and beneficiaries of
insurance contracts. The provisions of the Code are also intended to guarantee the financial
equilibrium of insurance undertakings, which is essential for the smooth running of the
insurance operation and for the solidity of the financial base of these undertakings.
The code allowed
 Protection of the weaker party (Objective 1).
 Maintaining financial equilibrium (Objective 2).
 Moralization of the sector ( objective 3 ).
The characteristics of the insurance contract
The insurance contract is a named contract. An examination of the texts governing it leads us
to situate it in the usual classification of contract law and to identify the following
characteristics:
1- It's a consensual contract :
A contract is said to be consensual when the consent of the parties is sufficient to form it. The
contract is thus valid and no formalities are required.
In insurance matters, the consent of the parties is sufficient for the validity of the contract. It is
therefore not mandatory to write a document.
2- It is a synallagmatic contract:
There is reciprocity of the obligations of the insured and the insurer. The insured undertakes
to make a declaration of the risks to be paid, to pay the premiums and to declare the
claim. Reciprocally, the insurer is obliged to perform its service in the event of a claim. It is
not required to insure the loss when the insured fails to perform its obligations or to honour its
commitments.
3- It is a contract for pecuniary interest:
In the insurance contract, there is no liberal intention as each of the parties to the contract
hopes to make a profit from the transaction.
The insured pays premiums or contributions in return for the security provided by the
insurer. It should be noted that we can speak of a liberal intention in the relationship between
the insured and the third-party beneficiary.
4- It is a successive contract:
The performance of the insurance contract is spread over time, the guarantee due by the
insurer is spread over time and can be provided for a long period.
5- It's a random contract:
A contract is said to be random when its effects depend on an uncertain event.
In the relationship between insurer and policyholder, there is a lot of uncertainty. The hazard
is true both in the case of coverage of an uncertain risk and in the case of a certain risk.
Note: From an economic point of view, the insurance operation is not random because the
scientific data allows the risks to be managed and compensated.
6- This is a contract of adhesion:
Large companies are able to negotiate the terms of insurance contracts on an equal footing
with the insurer, but policyholders generally adhere to a pre-established contract whose
clauses they cannot discuss.
In practical terms, the contract is a form of form in which the insured fills in the blanks.
Through the provisions of the Code, the legislator has taken care to temper the inequalities
between insurer and insured by multiplying the provisions protecting the weaker party.
It is in the same logic that the courts continue to interpret equivocal and ambiguous clauses in
favour of the insured.
7- It is a good faith contract:
This character leads to a requirement of loyalty on the part of the insured (in the formation
and performance of the contract).
For example, a breach of loyalty in the reporting of claims can be punished by forfeiture.
The insurance relationship will be studied in chronological order. It first arises from the
contract concluded between the two partners in insurance (Chapter 1).
The insurance relationship continues for a period of time freely determined by the parties. It is
determined within this period may be terminated by termination (Chapter 2).
Risk is the most important element (Chapter 3) the fulfilment of the obligations of the insured
and the insurer (Chapter 4).

Chapter 1: Birth of the Insurance

Relationship
The insurance contract is a synallagmatic contract that unites two partners: the insurer, who is
the insurance professional, and the insured, who is the consumer.
The insurance arises after the conclusion of the contract.
The insurance contract is a successive contract. Some changes may require an adaptation of
the contract, sometimes the modification of the contract seems necessary.

Section 1: Partners in the Insurance Relationship

In addition to its main function, which is to meet security needs, insurance is undeniably a
factor of economic progress.
It allows the renewal of the means of production destroyed by disasters, as well as the
constitution of a large mass of capital (thanks to the accumulation of premiums).
The importance of insurance in the national economy explains the interest it has been given
by legislators.
Also, the Insurance Code and all the annexed texts regulate the exercise of the profession by
insurers and determine the various categories of consumers.

Paragraph 1: Insurance professionals

These are insurance and reinsurance companies, intermediaries, insurance adjusters and
damage adjusters.

I. Insurance undertakings:
Article 48 defines insurance undertakings as undertakings which engage in the taking out
and performance of insurance contracts as defined in Article 1 of this Code as a normal
activity.
The insurance company is obliged to provide the consumer with a lump sum or intermediary
benefit in the event of a claim.
The insurer is always a legal person controlled by the State through the approval granted by
the Ministry of Finance on the advice of the Insurance Committee.
"In granting or refusing approval, the Minister of Finance shall take into account the
feasibility and solvency of the undertakings, in particular the action programmes, the
technical and financial resources put in place as well as the qualifications of the company's
directors and the structure of its capital or its common fund"
The status check continues even during the operation of the company.
These companies are also required to inform the Ministry of Finance of all the appointments
they are planning and to make to their boards of directors or key executives, while providing a
detailed statement of their skills and experience.
According to Article 50, the Minister has a period of one month from the date of notification
to object to the appointment of persons who do not meet the requirements of competence and
experience.
Insurance undertakings must be incorporated in one of the following forms:
 Public limited companies
 Mutual companies
 Agricultural Mutual Fund
Public limited insurance companies are governed by the Commercial Companies Code, to
which must be added certain provisions of the Insurance Code (all public limited companies
are commercial by form).
Mutual insurance companies. Article 55 of the Code considers them to be civil partnerships
provided that they guarantee their members, in return for a fee, the full payment of their
liabilities in the event of the realization of the risks assumed and that they distribute their
surplus income among their members under the conditions laid down in the articles of
association.

II. Insurance interrm :

These intermediaries distribute the insurance and are in contact with the insured.
The insurance intermediaries are the insurance broker, the insurance agent, the life insurance
producer, the banks and the National Post Office.
(1) The insurance broker shall:
According to Article 69 of the Code, it is the person who brings together policyholders and
insurance or reinsurance undertakings without being bound in the choice of the latter to insure
or reinsure risks.
The broker is the insured's agent and is liable to the insured.
(2) The insurance agent shall:
This is the person entrusted under a mandate to conclude insurance contracts
in the name and on behalf of one or more insurance undertakings.
He practises individually or as part of a professional civil partnership.

3) The life insurance producer:

Article 69 of the Civil Code defines it as follows: « It is a natural person, whether employed or
not, mandated by a company carrying out life insurance operations ».
The producer's activity is limited to the presentation of contracts and, if necessary, the
collection of premiums.
Insurance brokers, insurance agents and life insurance producers must have a
professional card and be registered in a register kept by the services of the "General
Insurance Committee"
(See conditions for granting the card, Art. 73)
4) Banks:
May conclude insurance contracts in the name and on behalf of one or more insurance
undertakings in certain classes of insurance.
(5) The National Post Office shall:
Article 39 L.F No. 2003-80 of 29 December 2003 allowed the National Post Office entrusted
under an agreement with the conclusion of insurance contracts in the name and on behalf of
one or more insurance undertakings.
Two additional remarks are in order:
Note 1: Damage adjusters and damage assessors are not parties to the insurance contract, as
their work is purely technical.
The expert is any service provider authorised to investigate the causes, nature, extent of the
damage and its assessment.
The damage commissioner is any service provider authorized to ascertain damage, loss and
damage to insured goods, to exercise recourse against responsible third parties and to take
precautionary and preventive measures to limit the aggravation of losses.
Note 2: The legislator has regulated professional bodies. Some have an advisory role, while
others exercise control over the profession.
They are the professional association of insurance companies that brings together insurance
and reinsurance companies.
According to Article 91 of the Code, the association is entitled to submit to the supervisory
authority any matter of interest to the profession as a whole.
* The National Insurance Council examines and issues its opinion on matters referred to it by
the Minister of Finance. These include questions relating to the state of the sector, how it is
organised and how it can be improved.
* The General Insurance Committee is a supervisory body (Law No. 2008.8 of 13 February
2008)
This committee reports to the Ministry of Finance. It ensures the protection of the rights of
policyholders, beneficiaries of insurance contracts and the soundness of the financial base of
insurance and reinsurance undertakings and their ability to honour their commitments.
Paragraph 2: Insurance consumers
The use of this term makes it possible to group together the various legal situations in which
an insurance contract arises.
1- The subscriber
This is the party to the contract on whose behalf the policy is signed and who agrees to pay
the premiums. ( This is also referred to as the policyholder ) .
Generally, the policyholder is the insured himself.
As stipulated in Article 3 of the Insurance Code (the insurance is contracted... on behalf of the
subscriber of the ... )
2- The insured:
The status of insured person cannot be reduced to that of a party to the contract, nor to that of
beneficiary.
This is the person who is threatened in his or her person or assets by the risk covered.
The status of insured person can be confused with that of policyholder, which is the most
common assumption in practice. This explains the legislator's assimilation of the two terms.
The insured may be the beneficiary of the insurance
According to Article 3 of the Insurance Code: « Insurance may be taken out ... either on behalf
of a specific person or on behalf of the person to whom it will belong ».
It is therefore an application of the mechanisms of ordinary law to the insurance
contract. (Stipulation for third parties)
3- Third parties
Article 242 of the Code of Civil Procedure, according to which "agreements shall have effect
only between the contracting parties", is subject to exceptions.
This is the case for insurance policies that benefit third parties:
 Life insurance benefits a third party who will receive the benefit due from the insurer in
the event of the death of the insured. ( Stipulation for third party )
In liability insurance, the beneficiary (victim) is a third party who was unknown at the
time the policy was taken out.
It is now necessary, and after determining the partners in the insurance transaction, to
understand the rules applicable to the conclusion of this contract.
Section 2: Conclusion of the insurance contract
The insurance contract is a long-term contract. After the initial conclusion of the contract
(paragraph 1), changes may occur and therefore require changes (paragraph 2).
Paragraph 1: The initial conclusion of the contract
In this paragraph, we will study the steps that lead to the formation of the contract (1) as well
as the time when it takes effect (2) , and the methods of proof applicable to it (3).
1- The formation of the contract:
The insurance contract is only formed when there is a meeting of two wills, that of the insurer
and that of the insured.
The offer presented by the insured will coincide with the insurer's acceptance.
* The offer is the insurance proposal made by the insured, by which the future policyholder
requests a guarantee against certain risks.
In practice, this proposal is a form pre-established by the insurer, including questions relating
to the risk of the future contract.
Article 7 of the Insurance Code also provides that "the insured is obliged to answer
fairly and accurately to all the questions set out in the risk declaration form by which the
insurer asks him at the time of conclusion of the contract about the circumstances which are
such as to enable him to appreciate the risks which he assumes".
The offer therefore comes from the insured, because the insurer only gives a signed printout.
The real offeror is therefore the insured.
It should be noted that the insurance proposal must meet the legal characteristics of the offer
as set out in Article 23 of the Coc.
It must therefore be complete, precise and contain the terms of the future contract.
It should be added that if the offer is made without delay, the offeror may withdraw it within a
reasonable period of time, as long as it has not been accepted by the insurer, the negotiations
initiated are then interrupted.
This is not the case when the offer is made with a delay.
According to the rules of common law (Art. 33 Coc) "the person who has made an offer by
setting a deadline for acceptance is bound to the other party until the expiry of the period.
It shall be released if no reply of acceptance is received within the time limit.
Acceptance :
The insurer is not bound by the insurance application made by the insured. They can refuse
the guarantee if, for example, the risk seems very high or if they do not fit into their activities.
The insurer's agreement brought to the attention of the insured is in principle sufficient to
form the contract, because the insurance contract is a consensual contract.
This agreement can take several forms (telegram, fax, cover note, etc.)
In order to avoid disputes, the insurer usually signs the policy by the insured.
It is even possible to make the conclusion of the contract subject to the payment of the first
premium. This payment becomes a condition for the formation of the contract, whereas it
normally enters into the phase of performance of a contract already concluded.
This solution is supported by the provisions of Article 2 of the Insurance Code, according to
which, before the contract or amendment is signed, the insurer and the insured may commit
themselves to each other by submitting a cover note which, unless otherwise stipulated,
indicates that the commitment is made on the basis of the general terms and conditions of the
insurance contract.
Thus, according to the doctrine of acceptance recorded in writing, any writing suffices for the
formation of the contract.
Finally, it should be added that, in accordance with the provisions of the COC (art 31), if the
insurer's response is made with reservations, it will be considered as a new offer and a
rejection of the insured's proposal.
2 - The effective date of the insurance contract:
Determining the precise timing of the effective date of the insurance contract is important, as
it is at this point that the insured is covered for the insured risk.
The applicable principle is that the contract takes effect immediately. There are exceptions to
this principle.
* The principle of immediate effect of the contract.
It is following the acceptance of the offer by the insurer that the contract takes effect.
Therefore, in the event of a claim, the insurer owes the promised benefit to the insured.
* The clauses relating to the effective date of the contract.
It is clear from Article 3. Infinitely the parties to the contract can agree on the effective date of
the contract. This date is therefore a matter of freedom of contract.
Thus, in practice, insurance policies include a clause that takes effect the day after noon on
the day on which the contract is concluded.
The claim is therefore only settled if it is later than the date stipulated in the contract.
It is also possible that the entry into force of the contract is subject to a certain term (e.g. the
day of delivery of a vehicle already ordered).
* The contract can take effect the day after the first premium is paid.
In this case, the contract is concluded, but the insurer's obligation is linked to the performance
of a certain event.
To implement this clause, the premium must be portable.
This is the principle laid down in Article 6 of the Insurance Code, which specifies that "the
insurance premium or contribution shall be payable at the domicile of the insurer or of the
agent designated by him for this purpose, however it may be payable at the domicile of the
insured or at any other place agreed upon in the cases and under the conditions to be fixed by
order of the Minister of Finance.
Where the insurer has issued the insured with a coverage note, this clause does not apply.
3 - Proof of the insurance contract:
Article 2 of the Insurance Code provides that certain clauses are to be drafted in conspicuous
characters. This provision does not in any way mean that writing is a condition of validity. It
means that the contract is proven in writing. In practice, the contract is always a private deed.
It goes without saying that proof of the insurance contract by a third party is voluntary.
The policy and the cover note are the reciprocal commitment of the insurer and the insured.
* Insurance policy
* Policy Mentions:
It is clear from Article 3 of the Code that every insurance contract shall include:
1 - The date of subscription
2 - Information relating to the Contracting Parties
3 - The insured risk or the term of the commitment
4 - The Insured Thing or Person
5 - Insurance premium or premium
6- The insured value.
7 - The effective date of the contract and its duration
The insurance policy includes general terms and conditions and special conditions.
General terms and conditions: These clauses are drafted by the insurer. They are
Common to contacts of the same kind.
Special conditions:
They make it possible to individualize the contract and adapt it to the various species. These
clauses mention the names and addresses of the contracting parties, the person or thing
insured, the nature of the risk insured, the starting point of the risk guarantee, the amount of
the insurance premium or contribution.
The legislator has laid down formal requirements relating to the drafting of contracts.
Certain rules tend to eliminate previous abuses by warning the insured and enlightening him
of all the exceptions that may be raised against him in the event of a claim.
Article 2 of the Code provides that the contract is to be drafted in conspicuous characters.
The same applies to clauses relating to nullities, forfeitures and exclusions of guarantees,
which are also mentioned in very prominent characters.
In practice, these requirements are met when clauses are written in bold type or in ink that is
different from the other clauses.
According to legal commentators, when the law provides for the drafting of the clause in very
conspicuous characters, it is not enough that the insured's attention be drawn to it, it is
necessary that the knowledge be facilitated by the great legibility of the clause
«
You have to force your attention, you have to detach it from the context so that you can be
quickly grasped by a quick reading ».
In practice, the policies are drawn up in three copies: one for the insured, one for the insurer
and one for the intermediary.
Policy Interpretation:
In accordance with common law, clear and precise clauses are not subject to interpretation
and must be applied clearly and simply.
Where there is a contradiction between the general conditions and the special conditions, the
special conditions must be applied.
Finally, obscurity and ambiguity must always be interpreted in favour of the insured.
As the insurance contract is a contract of adhesion, its interpretation will always be in the
interest of the weaker party.
The Cover Note :
The cover note is also called a cover letter or letter of guarantee.
It is a provisional document issued by the insurer by which it undertakes to immediately
insure the insured against one or more risks without waiting for the final drafting of the
policy.
The cover note is usually issued after the final agreement, but it is possible to give the insurer
a guarantee until the talks are completed. The cover note will no longer have any effect once
it is replaced by the policy.
The legislator did not require any particular form for the validity of the cover note
Also, any writing mentioning the main features of the contract concluded, signed by the
insurer may be considered as a cover note.
According to Article 2 of the Insurance Code, 'the insurer and the insured may bind
themselves to each other by submitting a cover note which, unless otherwise stipulated,
indicates that the commitment is made on the basis of the general terms and conditions of the
insurance contract.
It follows that, in the event of a contradiction between the terms of the cover note and the
general terms and conditions, the terms and conditions contained in the note shall prevail.
Paragraph 2: Modification of the insurance contract
Following the initial conclusion of the insurance contract, certain changes may occur.
An amendment to the contract is then necessary. The amendment takes the form of an
amendment. Its purpose is governed by the principle of freedom of contract.
1- Form of the amendment:
Art 7-2 of the 1930 Act provided.. <<An insurer that does not refuse a change proposal from
the insured within 10 days is deemed to have accepted it.
The Insurance Code has not included this provision. Article 2 provides that ''any modification
or addition to the initial contract must be evidenced by an addendum signed by both parties''.
Thus, and in accordance with the law of obligations (Art. 242 Coc), the insurance contract can
only be amended by mutual agreement. The endorsement recording the change is subject to
the same formal rules as the policy.
The delivery of a cover note can also be used in lieu of the policy. Finally, it should be noted
that the provisions of the endorsement must prevail when they contradict what is provided for
in the policy (because the endorsement reflects the recent wishes of the parties).
Remark:
The change must relate to an ongoing contract, or a suspended contract that can regain its
effectiveness. A contract that has ended will not be amended.
2- Purpose of the amendment:
Parliament did not place any restrictions on the subject matter of the amendment. Also, and in
accordance with the principle of freedom of contract, the amendment may relate to all
elements of the contract. For example, the contract can be extended if it is taken out for a
fixed period of time without a tacit renewal clause.
Chapter 2: Life of the Insurance
Relationship
The insurance relationship lasts over time. It is therefore necessary to determine the period
during which the parties remain bound to perform their obligations.
(Paragraph 1). The insurer and the insured may withdraw from the contract by terminating it
before it expires (paragraph 2).
Paragraph 1: Duration of the contract: legal duration of the contract
Paragraph1 of Article 5 of the Insurance Code laid down the principle that the parties are free to
determine the duration of the contract. .. Under the 1930 Act, the duration of the contract had
to be clearly stated in the policy.
The legislator did not adopt this provision in 1995. However, it should be noted that, in
accordance with the provisions of Article 3 of the Code, the duration of the contract is one of
the references to the policy.
According to one authoritative doctrine, '' this omission is unfortunate in so far as effective
protection of the insured presupposes at the very least that his attention be particularly drawn
to the duration of his commitment. ''The acceptance of the principle of the free determination
of the duration of the contract leads to the conclusion of contracts of fixed or indefinite
duration (such is the case of contracts concluded for the duration of the insurance company).
According to French legal doctrine, this contract is deemed to be of indefinite duration,
because although the duration of the company is set by the articles of association, the latter
can be modified by the decision of an extraordinary meeting.
2- Tacit renewal: Tacit renewal is of particular use to both parties to the insurance contract,
as the termination of the contract at the end of the stipulated term may harm the interests of
the insurer who loses the management of the contract. This termination will have a
detrimental effect on the insured, who may suddenly find himself without coverage on the
expiry date of the contract.
The tacit renewal was not provided for in the code. Its lawfulness is certain as long as the
parties insert a clause to provide for it.
Paragraph 2: Termination of the insurance contract
This paragraph will be devoted to the study of the hypothesis of periodic termination of the
contract (the Insurance Code has provided for several other hypotheses of termination of the
contract by the insurer (in case of reluctance, the termination provided for in Article 8 (3) and
(4)).
The aggravation of the risks (Art. 9 (2), (3) and (4)) may also constitute grounds for
termination of the contract for the insurer. This is also the solution in the event of non-
payment of the premium (Article 11) in the event of the disposal of a land motor vehicle
(art22.al 2). The insured person may terminate this contract in the event of a reduction in risk
(Art. 9. Paragraph 6) and in the case of the disposal of a land motor vehicle (Article 22).
In all the cases listed above, termination is not periodic.
Periodic termination is subject to certain conditions, and its implementation must comply with
certain forms.

1- The legal conditions of periodic termination

Article 5 of the 1930 law gave the 2 parties the right to terminate the contract every 10 years,
with an average of 6 months' notice.
When the contract is drawn up for an indefinite period.
This restrictive period for the insured has been modified by the legislator through more
advantageous provisions contained in Article 5.
Article 5: ''If this period exceeds one year, and subject to the provisions relating to life
insurance, the insured has the right to terminate the contract every year at the end of the
contract, giving notice to the insurer so that the insurer can exercise the right of termination,
this right must be mentioned in each contract.
With regard to the insured, the authors agree that the exercise of the right of termination is not
subject to the insertion of a clause mentioning this in the contract.
If the legislator has provided that this right of termination must be mentioned in every
contract, it must be inferred that it is a measure whose purpose is to protect the insured.
This measure is part of the insurer's obligation to inform the insured.
2 Implementation of termination:
The last paragraph of Article 5 provides that "notification of termination may be made either
by a notary bailiff or by registered letter with acknowledgment of receipt, or by any other
means indicated in the contract. The insurer may also be notified of the termination by means
of a declaration made to its offices against receipt'.
The insured therefore has the right to request termination by one of the various methods
provided for by law.
In general, the cancellation is made against receipt at the registered office or at the company's
representative. Cancellation by registered letter is also a common method used by both the
insured and the insurer.
In accordance with Article 5.al 1, the insured has the right to terminate the contract every year
at the end of the contract by notifying the insurer at least two months before the expiry
date ... If one of the parties to the contract uses the right to terminate by respecting the 2-
month notice period, the contract will end on the anniversary date of its effective date. It
follows that the insured who exercises his or her statutory right to cancellation does not cause
any prejudice to the insurer. As a result, he does not owe him any termination indemnity.
In addition, and given that the cancellation will take place after one year, the insurer is not
required to return a pro-rata premium for an unsecured period.
The premium divisibility rule does not apply.
Doctrine recognizes the validity of conventional causes for termination.
Article 274 of the Coc, which provides for the possibility of termination of the contract ''in
cases where one of them fulfils me by its commitments'', may be applied in the relations
between the insured and the insurer. It is therefore possible to provide in the contract that
either party or (one of them) reserves the right to terminate this contract by its sole will in
accordance with the conditions set out in the contract. These clauses are valid in that they do
not contradict the spirit of Article 5.
In addition, there is no provision in the Insurance Code prohibiting them. It should be
stressed, however, that these clauses must in no way lead to the circumvention of the public
policy provisions of insurance law. This is the case when a clause provides for automatic
termination for non-payment of the premium (art. 11). As contractual termination is not
provided for in the Code, it will therefore be up to the parties to determine the form and time
limit.
In the absence of these details in the contract, the ordinary law solutions may be
applied. (Article 22: Termination shall be deemed effective as soon as it has become known to
the party against whom it is taken).
Chapter 3: The risk that is the subject of the
insurance contract
The definition of the insurance contract allowed us to identify 3 elements: the risk, the
premium and the claim.
Risk is unquestionably the most important element because its determination has an influence
on the other elements of the contract.
The premium is determined according to the risk covered. The settlement of the claim is also
closely linked to the risk
Risk Definition:
It is a random event whose occurrence requires the insurer's guarantee. It is important to
delineate the risks covered (section 1) and to understand the rules governing their declaration
(section 2)

Section 1: Delineation of Risks Covered

The parties are free to determine the risk to be insured in pp.
However, certain legal provisions limit this freedom (paragraph 1).
The contracting parties may also restrict the guarantee or exclude certain risks from the scope
of the guarantee.
In this case, we will speak of conventional risk exclusions (paragraph 2)
Paragraph 1: Insurable Risks
Risk is the object of the contract and insurance.
It must be random, real and lawful.
1 - The randomness of the risk:
Contingency means the uncertainty of the occurrence or date of occurrence of an event.
Acts of God are insurable.
They can be caused by natural phenomena or by a third party.
It should be noted that, technically, some random events are not insurable.
This is the case with natural disasters (because the risk is not dispersed)
Acts of terrorism committed on the national territory are not insurable.
The act of the insured: the insurer is not liable for the damage resulting from the
intentional or fraudulent fault of the insured, (art. 4 (2)) because in this case the
randomness is totally lacking.
* Technical basis of prohibition: insurance is a guarantee of chance, intentional fault disturbs
chance.
* There are also moral reasons. It is immoral to take out insurance against one's own faults.
Intentional misconduct has not been defined by the Insurance Code. It is therefore necessary
to have recourse to the common law to determine the definition. This is the tortious fault as
defined by Article 82 of the Code of Civil Procedure: "any act whatsoever of man, which
causes the law, knowingly and wilfully causes damage to another".
In insurance matters, intentional fault implies the intention to create the damage.
2- The real nature of the risk:
The risk has to be real. It follows that it is not possible to insure a risk that was already
realized when the contract was taken out.
It is also not possible to insure property that has already been destroyed when the contract is
taken out.
Article 19 of the Insurance Code provides for this effect:<<The insurance contract is void if the
insured property has perished or can no longer be exposed to risks at the time the contract is
concluded."
3 - The lawfulness of the risk:
Article 4 of the Insurance Code provides that "any legitimate interest may be the subject of an
insurance contract."
The insurable risk must therefore be lawful.
The insurance contract may not have an object contrary to public policy or morality.
(Prohibited lottery risks, criminal convictions are not insurable (fines).
Only civil consequences of criminal offences are insurable.
Paragraph 2: Risk exclusions
Risk exclusions lead to the exclusion of certain events or damage from the scope of
insurance. In all these cases, there is "my-insurance".
Some risks are excluded by law (we have already seen that intentional or fraudulent fault,
natural disasters are excluded from insurance.
Technically, insurance can only cover dispersed risks so that compensation can be applied by
the law of large numbers.
Natural disasters and war lead to massive destruction of material assets and loss of life that
insurance could not cover.
It may be in the insurer's interest to restrict the scope of its coverage, on the one hand, by
defining it positively and, on the other hand, by stipulating the exclusion of certain risks.
The exclusion may relate to certain events, property or persons
Article 4 of the Insurance Code provides that "any direct or indirect interest in the non-
materialisation of a risk may be insured unless formally and limited exclusion. »
The legislator therefore recognizes the validity of risk exclusion clauses while subjecting
them to strict conditions.
The legislator again tends to protect the weaker party who is not always in a position to
understand the true scope of these clauses. The exclusion must be formal, limited and written
in conspicuous characters.
1 - The exclusion must be formal:
This condition presupposes clarity and precision in the wording of the exclusion.
The wording must therefore unequivocally reflect the intention of the parties to exclude
certain risks from the scope of insurance.
Exclusion can take two forms.
A direct form: in this case the cases of my insurance are expressly listed in the policy.
The formula used is: "all risks are guaranteed except..."
E.g. (Article 118 of the Code provides that the insurance contract may provide for exclusions
of coverage in the following cases, a) When at the time of the loss, the driver is not of the
required age to drive the insured vehicle.
b) When, at the time of the accident, the driver does not possess valid certificates issued by
the regulations in force for the driving of the said vehicle....
(c) With regard to damage suffered by persons transported by a land motor vehicle, when the
transport is not carried out under the safety conditions established by the regulations in force.
* An indirect form:
In this case, the insurer lists the insured risks precisely, which implies the exclusion of the
risks not mentioned.
E.g. when the insurer simply stipulates in the contract that the civil liability insurance covers
any driver with a driver's license.
On the other hand, any driver without a license is not guaranteed.
The indirect wording of the exclusion has been criticized by some commentators as it can
sometimes be a source of ambiguity and ambiguity in determining the true intention of the
parties.
The French Court of Cassation has thus decided in a case where the contract guaranteed the
consequences of tortious liability, that this clause cannot lead to the exclusion of damages
resulting from contractual liability.
(Resp. contract/delic) It is difficult for a consumer to understand the distinction between
contractual liability and tort.
2 - The exclusion must be limited:
Such a condition leads to a requirement of precision and a clear delimitation of the
exclusion. Therefore, general exclusions of a vague nature are not permitted.
The exclusion of damages resulting from the violation of laws and regulations or the general
exclusion of the consequences of gross negligence. (Since the assessment of this concept is
subjective, it can only be excluded from coverage if the policy defines what is meant by it.)
The case law is reluctant with regard to these exclusion clauses and does not hesitate to
declare them null and void when they are general and imprecise.
It is in line with the legislator's wish to avoid a situation of non-guarantee for the insured,
which may be the result of an ambiguous clause.
3 - The exclusion is written in very conspicuous characters:
Article 12 (3) renders null and void any clause enacting nullities, forfeitures or exclusions not
mentioned in very obvious characters.
Once again, this provision is intended to protect policyholders, as the writing of clauses in a
particular typography makes it possible to appeal to policyholders and attract their attention.
It should be added that this formal requirement is applicable to all exclusions, whether direct
or indirect.
(When they are indirect and therefore result from an a contrario definition of the risk covered,
it is the definition of the risk that must be written in very obvious characters).
In practice, exclusion clauses are often written in bold or a different colour.
* There is one final problem with risk exclusion clauses:
Who bears the burden of proving that the conditions for the validity of the exclusion clause
have been met?
French case law has ruled on the problem (Cass 22Oct 1980) by deciding that « it is for the
insurer who invokes an exclusion of coverage to demonstrate that the factual conditions for
such exclusion are met »
The solution has been criticized by some French authors (it has been considered harsh for
insurers). This solution seems to us to be in harmony with the principles of protection of the
weaker party in insurance law.
Section 2: Risk Statement:
The Insurance Code requires the insured to declare the risk to the insurer. This statement is
important because it allows the insurer to form an opinion on the risk.
Paragraph 1: The principle of risk reporting
Under common law, each contracting party must, before committing himself, make his own
information. This principle cannot be transposed to insurance law, because the insurer can
only obtain certain information with the help of the insured: Information is important when
the risk is initially declared, The same applies in the performance phase of the contract, new
circumstances may arise (aggravation or decrease of the risk). The insurer is also required to
declare them, as they may require an adaptation of the contract.
The initial declaration of risk:
This is a fundamental obligation of the insured. Its fulfilment is decisive for the insurer's
consent. It is important to determine the form of this statement before specifying its scope.
1) * Form of declaration:
The Insurance Code has abandoned the system of spontaneous declaration of risks that
prevailed under the aegis of the 1930 Act.
Article 15 of that law required the insured to declare exactly at the time of conclusion of the
contract all the circumstances known to him which were such as to cause the insurer to assess
the risks which he assumed.
From now on, the directed declaration system applies.
Article 7 of the Insurance Code obliges the insured to answer fairly and accurately all the
questions contained in the risk declaration form by which the insurer asks him when the
contract is concluded about the circumstances which are likely to enable him to assess the
risks he assumes.
This formula makes it possible to guide the insured in his declaration precisely, since he is
generally unfamiliar with the insurance technique. As a result, they cannot know exactly what
information is relevant to the insurer.
The questionnaire is usually a form written by the insurer.
The insurer completes and signs this form when making its insurance application.
The insurer trusts the insured's statements. (the insurance contract is a bona fide contract)
In the light of these declarations and taking into account the probability of the risk and its
intensity, he may accept the insurance proposal. However, for various reasons (the insured's
history, solvency, bad risks), the insurer may also refuse the offer.
2 ) * Scope of the declaration:
It is a question of specifying the circumstances to which the declaration will relate.
These circumstances may be objective or subjective.
*a- Objective circumstances:
It is the circumstances that relate to the very subject matter of the contract.
They allow the insurer to measure the frequency and intensity of the risk. (e.g. in the case of
car insurance, the insured will specify the family or professional use of the vehicle, its model
and the age of the driver). These circumstances determine the amount of the premium.
*b - Subjective circumstances:
They concern the person of the insured person himself.
(Has he been the subject of any civil or criminal convictions on occasion?)
Some authors have expressed reservations about this form of declaration.
This is because the insured generally does not have the necessary technical knowledge to
answer the questionnaire pre-established by the insurer.
"Regardless of their loyalty, the insured will often find it difficult to be precise and complete
as required by law"
Doctrine has therefore proposed that the supervisory authority and the insurance federation
should draw up a standard questionnaire for each category of insurance.
This will allow the insurer to obtain information on the objective and subjective elements,
which are decisive in its assessment of the risk.
The insured's protection will be optimised if the questionnaire is written in clear and
understandable language.
Previous accident? If he has had his driver's license revoked, has he ever been thrown away
by another insurer?
Subjective circumstances determine the insurer's opinion of the risk (they do not influence the
premium rate).
The declaration during the contract of the aggravations and decreases of risks:
In the course of the performance of the contract, new circumstances may arise.
These can be aggravations as well as decreases in risk. The purpose of the insurance, which is
security, then requires an adaptation of the contract.
Article 7 (3) provides that the insured person is obliged "to declare new circumstances which
have arisen in the course of the contract and which render the answers given to the forms
inaccurate.
"These provisions do not apply to life assurance contracts. ( al . Last of Art 7 C.A) because by
taking charge of insuring someone's life, the insurer must automatically guarantee the
aggravation of the risk which are ageing and illness, and it is only in this respect that life
insurance fulfils its purpose.
(1) The concept of new circumstances:
"In the event of an increase in the risk during the course of the contract, such as if the new
circumstances had been declared at the time of the conclusion or renewal of the contract, the
insurer would not have contracted or would have done so only in return for a higher
premium. (Legal definition).
The increase in risk must be distinguished from the increase in the value of the insured
property over the course of the contract.
Example of replacing mediocre furniture with authentic antique furniture does not change the
fire risk but only the value of the insured property.
* Risk reduction: This assumption has been provided for in Article 9. It concerns cases in
which the intensity of the risk has decreased after the conclusion of the contract to the point
that if that reduction had existed at the time of the conclusion of the contract.
The insurer would have concluded it on terms that were less onerous for the insured.

(2) Declaration regime

- Deadline for the declaration: It is eight days from the time the insured became aware of
it. This period is applicable both in the event of an increase in the risk
than in that of its decrease.
- Form of the declaration: in order to avoid disputes between the parties and to preserve a
means of proof, the legislator has specified in Article 7 that the insured must declare the new
circumstances by registered letter.
3 )Consequences of the declaration:
A distinction must be made between the hypothesis of an increase in the risk and that of a
decrease in risk.
(a) Consequences of declaring aggravation of risks.
It is clear from a reading of Article 9 C.A. that two situations must be distinguished.
The hypothesis provided for in paragraph 1 of the article according to which, the existence of
new circumstances at the time of taking out the contract would have led the insurer not to
contact or to do so only in return for a higher premium.
The second hypothesis provided for in paragraph 2 of the same article concerns circumstances
which would have led to an absolute refusal to contact on the part of the insurer.
The hypothesis of Art. 9 para. 1: circumstances justifying an absolute refusal to
contact.
The article recognises the insurer's right of unilateral termination (subject to the special
provisions relating to compulsory insurance).
The exercise of this right of termination is only possible if the aggravating circumstance has
been mentioned in the contract.
Realization is an option offered to the insurer. He can therefore exercise it or renounce its
exercise. This means that the insured cannot invoke it to terminate the contract.
The hypothesis of Art. 9 para. 2: Circumstances that do not justify an absolute refusal
to contact:
The insurer may, during the course of the contract, increase the insurance premium or
contribution in the event of an increase in the risk such that, if the new circumstances had
existed at the time of the contract or renewal, the insurer would not have contacted or would
have done so only in return for a higher premium or contribution.
If the insured does not accept, the insurer may only exercise the right of cancellation 30 days
after notifying the insured of the request for a premium increase.
The change must be made by registered letter with acknowledgment of receipt, and must
mention the 30-day period.
The article specifies that the insurer may exercise its right only after having previously
mentioned the aggravating circumstances in the contract.
b/ Risk reduction
(See the provisions of Article 9 (6) of the Insurance Code).