During the past few years, the Israeli Commissioner of Insurance published a long list of guidelines which dictated insurers’ conduct – both during the underwriting process (including guidelines for the drafting of an insurance programme) and during the claims handling process.
On 28 March 2011, the Commissioner published detailed guidelines determining the documents which are to be involved in the claims handling process, the dates and information which should be provided to the insured/third party etc.
On 16th September 2015, the Commissioner published a draft Annex to the above guidelines. According to the Commissioner, following audits carried out with several insurance companies, the necessity for further guidelines – arose.
Hereunder are the main guidelines included in the draft Annex. According to the guidelines and the Annex, they are relevant to all types of entities filing claims/demands against insurers including an insured, a beneficiary and a third party that was injured by an insured (hereinafter: Plaintiff).
- When a claim is filed with the insurer, plaintiff will be entitled to choose the mode of communication – mail, e-mail, fax or any other way.
- No handwritten messages will be transferred to plaintiff.
- A letter of declination will refer to an expert opinion filed by plaintiff, including an explanation as to why it was not accepted.
- A letter of declination will mention the circumstances taken into account in reaching the decision to decline and the documents the insurer relied upon. Plaintiff will be allowed to view the documents.
- An insurer may not decline coverage based on an allegation of non-disclosure if the insured was not specifically asked about same issue or was asked but did not answer.
- When a claim is declined based on an allegation of fraudulent non-disclosure, the insurer will specifically mention that fraud is the reason for declination and the implications of the declination. In addition, an insurer will mention the sub-section of the law it relied upon.
- A private investigator will not be paid based on the results of the investigation. A private investigator is not permitted to present himself as a public employee or acting on behalf of a company which provides a vital service. An insurer which bases its decision on a private investigator’s report will detail the main findings revealed during the investigation.
- An insurer will not deduct amounts from third party claims based on allegations of “contributory blame” without detailing the facts and circumstances which form the basis for the allegation of contributory blame.
The Commissioner invited the insurance companies to submit their remarks not later than 29th October 2011. Discussions re the draft guidelines will be held between 8-10th November 2015.
 This guideline is contrary to clause 6(c) of the Insurance Contracts Law 1981 which determines that the concealment by the Insured, with fraudulent intent, of something he knows to be a material matter, will be treated as the giving of a reply which is not complete and straightforward.