Applicable Law to Insurance Contracts in the light Of Rome I Regulation – Challenges to Cross-Border Insurance Contracts in the EU

Abstract

This article explores the current situation of cross-border insurance contracts within the EU. In contracts that do not involve a conflict of laws, the determination of the applicable law is hastily and of a relatively easy resolution, as they will be disciplined by the substantive law of the current legal order, which they only have contact with. When it comes to insurance contracts that are seen in a conflict of laws, defining the applicable law raises a question since these contracts are in contact with at least more than one legal order. In this case, there is a certain amount of uncertainty regarding which judicial order will govern the contract and the criteria that will dictate this resolution. When we refer to an insurance contract that involves a conflict of several laws, such as a policyholder with regular residence in MS A, who contracts an insurance contract with an insurer based in MS B, whose risk is in MS C. Due to this, there are several points of contact with different legal orders. As such, it will be necessary to establish what the contract's regulatory law should be. In the EU domain, the answer to this issue is to reflect on the regulations defining the applicable law. In this context, we highlight the Rome I Regulation, which establishes in its article 7 a special conflict rule, hence appearing as the starting point for the problem raised by us. This way, we will focus on the analysis of the solutions contained in article 7, related to large risk contracts and contracts covering mass risks whose unpredictability is located within the EU. Finally, we will explore legal solutions to establish an applicable law in association with the principle of free movement. In particular, as seen in a classic case of an active insurance seeking, where the policyholder, in the light of his freedom of movement, decides on his own to hire insurance from another legal system, apart from his home state.