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Section 1: Claims adjustment, interest, payments on account, etc.

  • Clause 5-1. Duty of the assured to provide particulars and documents

    The assured shall provide the insurer with such information and documents as are available to him and are required by the insurer for the purpose of settling the claim.

    If the assured, intentionally or through gross negligence, fails to fulfil his duties according to sub-clause 1, the insurer is only liable to the extent he would have been liable if the assured had fulfilled his duty.

    If the assured has acted fraudulently, the insurer is free from liability. In such case, the insurer may also cancel any insurance contract he has with the assured by giving fourteen days' notice. Notice of cancellation must be given without undue delay after the insurer has become aware of the fraudulent act.

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    Clause 5-1. Duty of the assured to provide information and documents

    This Clause corresponds to Cl. 83 of the 1964 Plan, Cefor I.29, and PIC Cl. 5 no. 8, and the relevant Nordic Insurance Contracts Acts (Nordic ICAs). Sub-clause 1 is identical to the 1964 Plan. The provision establishes the duty of the assured to provide the insurer with such information and...

  • Clause 5-2. Claims adjustment

    The insurer shall issue the claims adjustment as promptly as possible. He may give responsibility for drafting the adjustment to an average adjuster.

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    Clause 5-2. Claims adjustment

    This Clause corresponds to Cl. 84 of the 1964 Plan and the relevant Nordic Insurance Contracts Acts (Nordic ICAs). The Commentary was amended in the 2010 version. The first sentence to the effect that the insurer shall issue the claims adjustment as promptly as possible is identical to the 1964...

  • Clause 5-3. Rates of exchange

    If the assured has made disbursements in a currency other than that of the sum insured, conversion shall be based on the rate of exchange on the date of disbursement. If disbursements become payable at a certain time and the assured without due reason fails to pay them when due, he may not claim compensation at a higher rate of exchange than the rate effective on the due date. If the assured has, in consultation with the insurer, purchased foreign currency in advance, the rate of exchange on the date of such purchase shall be applied.

    If the insurer is liable for costs that have not been paid when the adjustment is issued, conversion shall be based on the rate of exchange on the date that the adjustment is issued.

    If the sum insured is stipulated in a currency different from the currency stipulated for the deductible or other amounts stated in the insurance contract, conversion to the currency for the sum insured shall be made on the banks’ last sales rate before the insurance attaches.

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    Clause 5-3. Rates of exchange

    Sub-clauses 2 and 3 was amended in the 2013 Plan to abolish the reference to “Norwegian Kroner” (NOK). The wording of paragraph 2 and 3 below was edited to clarify the relevant points. It is standard international practice that the conversion from one currency to another in the claims adjustment ...

  • Clause 5-4. Interest on the compensation

    The assured may claim interest as from one month after the date on which notice of the casualty was sent to the insurer. If the insurer has to refund the assured's disbursements, interest accrues from the date of the disbursement. If the insurer is to indemnify the assured for loss of time, interest does not accrue until one month after expiry of the period for which the insurer is liable.

    If the assured fails to provide information and documents as mentioned in Cl. 5-1, and the settlement as a result thereof is delayed, he may not claim interest for the resulting loss of time. The same applies if the assured unjustifiably rejects full or part settlement.

    The rate of interest is six month CIBOR, NIBOR or STIBOR + 2 % for insurance contracts in which the sum insured is stated in Danish Kroner, Norwegian Kroner or Swedish Kronor respectively, and otherwise six month LIBOR + 2 %. Interest is determined as at January 1 of the year the insurance contract comes into effect at the average rate for the last two months of the preceding year.

    After the due date, cf. Cl. 5-6, interest on overdue payments accrues according to the rate stated in sub-clause 3 + 2 %.

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    Clause 5-4. Interest on the compensation

    Sub-clauses 3 and 4 were amended in the 2013 Plan. In the event of a total loss, it is the notice of the casualty, and not the claim for total loss, that forms the basis of the duty to pay interest. This also applies to condemnation, even if it takes a long time to decide the question of...

  • Clause 5-5. Disputes concerning the adjustment of the claim

    If the assured does not accept the insurer’s adjustment, the assured as well as the insurer may demand that the adjustment be submitted to a Nordic average adjuster for his opinion before the dispute is brought before the court. The average adjuster shall be chosen by the assured. If the assured fails to appoint an adjuster, the insurer may appoint the adjuster.

    The costs of submitting the case to an average adjuster shall be borne by the insurer, unless the assured’s demand to have the insurer’s adjustment reversed is clearly unfounded.

    The rules in sub-clauses 1 and 2 shall apply correspondingly when the insurer has rejected the assured’s claim for compensation.

    Where an insurance contract is subject to Finnish or Swedish law and jurisdiction, any dispute concerning the adjustment of the claim shall be submitted to the Finnish or Swedish average adjuster respectively before the dispute is brought before the court.

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    Clause 5-5. Disputes concerning the adjustment of the claim

    Sub-clause 1 of this Clause was amended and a new sub-clause 4 was added in the 2013 Plan. Sub-clause 1 sets out a right for both parties to demand that the adjustment be submitted to a Nordic average adjuster before the matter is brought before the courts. The average adjuster shall not make any...

  • Clause 5-6. Due date

    Compensation is payable four weeks after the date when the claim adjustment is or should have been issued.

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    Clause 5-6. Due date

    The time-limit was changed from six to four weeks in 2016. The time-limit takes effect from the time the claims adjustment “is or should have been issued”, cf. Cl. 5-2 for further details. If the time-limit is exceeded, the calculation of interest will be affected, cf. Cl. 5-4, sub-clause 4.

  • Clause 5-7. Duty of the insurer to make a payment on account

    If the assured, before the adjustment can be issued, proves that he has incurred, or will in the near future incur, major expenses or losses which are covered by the insurance, he is entitled to an appropriate payment on account. If the payment on account concerns expenses which the assured has not yet paid, the insurer has the right to pay the amount directly to the third party concerned.

    The rules contained in the preceding sub-clause do not apply if the insurer has reasonable doubts as regards his liability. A payment on account by the insurer in no way affects the question of his liability to the assured.

    The insurer may claim interest at the same rate as under Cl. 5-4, sub-clause 3. If he makes a payment on account in respect of an amount allowed in general average, he may claim interest at the rate adopted in the general average adjustment. In loss of hire insurance, the insurer may demand interest on advance payments from one month after expiry of the period for which he is liable.

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    Clause 5-7. Duty of the insurer to make a payment on account

    This Clause corresponds to Cl. 90 of the 1964 Plan. The provision has a parallel in relevant Nordic Insurance Contracts Acts (Nordic ICAs), which provides that the insurer shall make a payment on account if it is clear that he is liable for at least part of the claim. Sub-clause 1, first sentence...

  • Clause 5-8. Payment on account when there is a dispute as to which insurer is liable for the loss

    If one or more insurers are involved in a dispute as to which of them is liable for the loss, each of them shall, on demand, make a proportionate payment on account in respect of the claim. This duty is conditional upon none of the insurers having raised other objections to the claim. If their contingent liability for the loss differs, the payment on account shall be based upon the lowest liability.

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    Clause 5-8. Payment on account when there is a dispute as to which insurer is liable for the loss

    This Clause is identical to Cl. 91 of the 1964 Plan. According to the first sentence , the insurers shall make a proportionate payment on account of the compensation if there is a dispute as to which one of them is liable. A dispute as to which insurer is liable for a certain loss should not be t...