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Insurance Portfolio Transfers - answers to frequently asked questions.

by Adv. Irit Shapira Webber and Adv. Deror Lin

The practice of payment of Ransom in order to free a person who was kidnapped or goods which were stolen is known since the beginning of written history. Roman records show that even Julius Caesar was kidnapped by pirates and ransom had to be paid in order to secure his release. Throughout the middle ages history records mention payment of ransom to secure the release of people (such as Richard the Lion Heart) and property.

Even in modern times such payment is often required by pirates, who hijack ships (recent cases involve hijacking of ships near Somalia in the Gulf of Eden).

Several recent Israeli Court cases have dealt also with the relationship between the payment of Ransom by an insured and his obligation to mitigate his losses.

by Adv. Rachel Levitan

The Limitation Period Applicable to Claims under Insurance Contracts.

by Adv. Sharon Shefer

The Israeli Chapter of a Multi-Jurisdictional guide to litigation costs (published in March 2010) under the name "At What Cost?" - a Lovells Multi-Jurisdictional Guide to litigation costs.

By Adv. Rachel Levitan and Adv. Sharon Shefer

In June 2009 the Commissioner of Banks issued a directive to all commercial banks in which he demanded that the banks take into consideration their exposure to environmental risks from various aspects of their activities.

By Adv. Peggy Sharon 

Until recently Israeli insurers used the doctrine of contributory negligence in order to reduce insurance benefits to insurds who contributed to the occurrence by their negligence or breach of precaution terms in the policy. Recently the commissioner of Insurance published its position paper regarding the use of the legal theory of contributory negligence in insurance claims. The following article will deal with this development.  

By Adv. Yael Navon

In a recent Court judgement handed down by the Magistrates Court of Tel Aviv, the Court denied an insurance claim due to the fact that the insured provided false information regarding the identity of the driver of the insured car. The false information was provided in order to try and avoid payment of the high deductible which applied to damages caused by a young driver.

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By Idit Speiser, Adv.    

On 31^st August 2009 the Israeli Commissioner of Insurance (hereinafter: "the Commissioner") published new directives concerning claims handling and public appeals management by various institutional bodies, including insurance companies. The new directives which will come into force on 1^st July 2011, apply to several branches of insurance including pension, life insurance, personal accident insurance, health insurance (excluding dental insurance), motor vehicle and apartment insurance.

On 24 April 2009 the Haifa District Court handed down its decision in an insurance claim filed by Sky Club Ltd - C.F.270-00.  In its decision, the District Court ruled that an insurer which failed to pay insurance benefits on time may be obliged to compensate the insured for the damage it suffered as a result of the delay.

Several years ago the Commissioner of Insurance issued two directives regarding an insurer's duty upon declination of coverage. The first, issued on 9 December 1998 provided that when an insurer decides to decline coverage it must include in its letter of declination all the reasons which have led to taking this decision.  The second directive, issued on 29 May 2002 provided that an insurer may raise declination arguments which were not included in its letter of declination only if they are based on new circumstances which developed after the letter was issued or if the insurer could not have known about them at the time it declined the insured's claim.

During November 2007 a new judgement was handed down in the District Court of Jerusalem which may significantly influence the exposure of insurers and reinsurers under Third Party / Public Liability policies.

According to the Israeli Law, when a claim is filed against a tortfeasor (who is not the employer) by an employee who was  injured while engaged at  work in the tortfeasor's premises, the tortfeasor will be required to pay for the damage sustained, less the payment received by plaintiff from the National Insurance Institute (NII).

 By Adv. Rachel Levitan

The insurance business in Israel is governed by two specific laws:

The Insurance Contract Law -1981 which deals mainly with the insured-insurers relations and the Insurance Control Law -1981 which deals with the supervision of insurance business in Israel.

Activities of Non-Admitted Companies in Israel; Restrictions on Holdings of Means of Control; Solvency Control; Participation of Banking Organizations in the Insurance Industry; The Position of the Intermediary (Broker) - The Agent of the Insurer; The Formation of an Insurance Contract; The Effect of Non-Disclosure.

Israeli statutory law relates to the banks as powerful and proficient entities which have the advantage over the typical client, and therefore imposes on the banks a series of specific and general duties towards their clients. According to the Banking Law (Service to Customers) - 1981 the bank owes special duties towards its clients such as: a duty of proper disclosure of the services provided by the bank and of the banking commission charged, a duty not to mislead, a duty not to take advantage of language barriers or of a client in mental or physical distress, etc. 

By Adv. Peggy Sharon and Adv. Yael Navon

Recently, the Supreme Court, for the first time, referred in its ruling to a policy on a claims-made basis.  The validity of the claims-made provision was not the issue of this case; however, from the ruling it is clear that the Supreme Court recognizes claims-made provisions as a legitimate basis of insurance. 

Claims-made Policies - General; Magistrates and District Courts - Contradictory Rulings; The Supreme Court Ruling; The Implications of the Supreme Court Ruling

By Adv. Peggy Sharon and Adv. Sharon Shefer

The legal currency in Israel is the Israeli Shekel. The jurisdiction of the various Courts (i.e. Magistrates, Districts) is determined according to the amount in Israeli currency of the claim. In many cases, the amount claimed is in a foreign currency but is converted to Israeli currency for the purpose of the Court’s jurisdiction and payment of Court fees.

The latest events involving the Ifsrael Trade Bank Ltd. and the Israel Industrial Development Bank Ltd. once again raise the crucial question: Are people who deposit their money in various banks in Israel, secured against the collapse of the bank or its insolvency? Is it not time to oblige the banks to buy insurance to cover the depositors, which will protect them in the event of the bank’s collapse? Or alternatively, is it not time to enact a law to this effect?

 According to Section 70 of the Insurance Law, in Liability Insurance the insured’s claim shall not be time barred until the claim of the third party against the insured has prescribed. Since this section is drafted in the negative, a question has arisen: when will an insurance claim against the liability insurer be time-barred? In the judgement handed down in A.C.A. 5916/02 Hamishmar v. Eliahu Insurance Co. and Others the Supreme Court ruled that the claim against the liability insurer is time-barred after the expiry of seven years from date of filing the claim by the third party against the insured.

 By Adv. Peggy Sharon and  Adv. Tammy Greenberg

The limitation period for filing an insurance claim against an insurance company is a critical issue to the rights of the parties to the insurance contract.

This newsletter focuses in the various aspects of this issue and summarises the relevant judgments.

The Insurance Control Law of Insurance Business - 1981 ('the Control Law'), provides that the insurance broker is the one who acts as the intermediary between the insured and the insurer. The Control Law does not distinguish between types of brokers in the insurance market, as it is customary in Europe and U.S.A. (e.g. insurance broker/insurance agent/insurance consultant).

On 29th July, 1997, the Israeli Parliament (the Knesset), approved an amendment to the Israel Insurance Business Control Law - 1981, (hereinafter: the Control Law) to include a specific chapter regarding class action.

Approval by the Court; Definition of the Class; Arrangement or Compromise; Special Indemnification and Compensation.

In the ever increasing litigious environment in Israel, the field of liability and casualty is no exception. The development of the service industry has brought about a phenomenon of growing numbers of malpractice claims against various professionals. Simultaneously, the insurance market has responded to the increasing risks and needs.

This article intends to cover the legal and practical aspects relating to liability and casualty insurance in Israel.

 By Adv. Peggy Sharon and Adv. Sharon Shefer

Insurers are often faced with cases in which part of the fault for the loss or damage lies with the assured or someone on its behalf, nevertheless, they are obliged to pay insurance benefits regardless of the assured's acts.

In these cases, during the past few years, the Israeli courts have begun to adopt the contributory fault doctrine also in insurance cases.