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#Insurance Contract Law - European Commission

European insurers generate premium income of over 1 100bn per year, employ nearly one million people and have invested almost 8 400bn in the European economy. Even a minimum contribution to growth in this sector could have a significant positive impact on the economy as a whole.

Increased cross-border trade offers promising opportunities for growth in the insurance sector. However, efforts to expand intra-EU trade in insurance products are hampered by differences in national contract law.

Buying and selling insurance in the EU is governed by national contract laws. Insurance coverage is a service that is exclusively defined by legal terms and provisions. In contrast to the sale of goods like washing-machines or clothes, insurance coverage depends on a particular legal framework and can be applied differently in different national legal environments.

As a result, if an insurer wishes to offer his products in other Member States, he may have to design different products for each of his intended national markets to comply with different national insurance laws. This may be costly for insurance companies and makes it almost impossible to offer the same insurance contract in more than one Member State.

Removing contract-related barriers to cross-border insurance services would enable insurance companies to take full advantage of the European Single Market. Tackling such bottlenecks in the Internal Market is part of the Commission's "Europe 2020" strategy for promoting sustainable economic growth throughout Europe.