Statutory interest payable by the insurer

Article 493(1), point 5, of the Insurance Code, read together with Article 429(2), point 2, of the new Code, expressly defines the contractual obligations under third-party liability insurance. Under this statutory limit, the interest the insurer owes the injured party runs from the earliest of the following dates: the date on which the insured notified the insurer of the insured event under Article 430(1), point 2; the date on which the injured party notified the insurer; or the date on which the injured party lodged an insurance claim.

In other words, the person who caused the harm is liable for interest from the date of the wrongful act. Under the Insurance Code, however, the insurer covers that liability only from the later point at which it learned of the insured event. There is no statutory basis for making the insurer pay interest for the period between the harm and notification. This is the effect of Article 493 read together with Article 429(2) and (3): the indemnity includes interest for delay only where the insured is liable to pay it to the injured party. Article 429(3) lays down two limits on a claim for interest. First, it must fall within the sum insured (the limit of liability). Second, interest is calculated from the earliest of notification by the insured under Article 430(1), point 2, notification by the injured party, or submission of an insurance claim by the injured party.

Given the specialised nature of insurance law and the considerable litigation experience of the in-house counsel and lawyers who represent insurers, proceedings under the Insurance Code should be brought and conducted by a lawyer experienced in insurance law.

This article is not a legal opinion or advice on any particular situation or person. For legal assistance in a similar case, consult a lawyer.