Components of the Insurance Contract

Peculiarities of Insurance Contract.

The insurance contract establishes the legal relationship between the insurer and the insured which obliges the insurer to pay the insurance amount in case the insurance event is created, and the insured to pay the insurance premium in favor of the insurer. The insurance contract is a civil legal relationship which is governed by the current Civil Code. Civil legal relationships are distinguished from other legal links, for their property character. Their subjects, natural or legal persons, appear as subjects of individual and coercive rights regulated by civil law norms.

Insurance, as a civil legal relationship consists of three essential elements essential to its existence:

• the entities between which the public legal connection is established;
• the object of civil legal relationship;
• the content of this relationship, which consists of rights and
  obligations of the parties deriving from the real legal relationship.

From the wording of provision 1113, we find that the legislator has defined the meaning of both the contract of insurance of the property of the natural or legal person, as well as the contract of I am ensuring the life and health of the natural person. The meaning of a property insurance contract is given in paragraph “a” of Article 1113.
The meaning of the contract of life and health insurance of a person is given in paragraph “b” of Article 1113. It is noted the changes that these contracts have in their object, wherein the first case, the purpose of the insurance contract is the property of the natural person. or legal, while in the latter case the object of this contract is the life and health of the natural person. Also, the insurer’s obligations regarding the payment of the insurance amount are not the same in these two contracts.

Thus, in the case of property insurance, the insurer is obliged to compensate the insured for the damage suffered by the occurrence of the insurance case, understood within the amount specified in the contract, while in the case of insurance of the person, upon the presence of the event. Of the coverage, the insurer does not reimburse the damage in favor of the insured but is obliged to pay a certain amount, according to the conditions stipulated in the contract. Keep in mind here that a person person’s life and health are irreplaceable and cannot be converted into cash, whatever their amount, the reason why the legislator in the case of personal insurance has provided that the insured is obliged that upon the occurrence of the insurance, to pay in favor of the insured the amount of coverage offered in the contract, and not to compensate him for the damage suffered.

Form of the insurance contract

The insurance contract for the very fact expressly provided for by the Civil Code is a formal solemn contract. An insurance contract is a formal, binding bilateral contract, which is based on the mutual consent of the parties. This characteristic is expressly provided for in the Civil Code, according to which the insurance contract must be signed in writing, namely in the form of insurance proof or an insurance policy, because Otherwise, this contract is void. In this case, the structure of the contract is for validity (ad substantial) and is part of the content. It follows that the legislator has not only restricted the autonomy of the parties’ will, in the sense that this autonomy of will has to be worn in a particular form which is the written form, but has also provided for the concrete way how this contract should be drafted, which is insurance proof or insurance policy.

Under these conditions, we can conclude that the insurance contract must be drafted not only in paper form but also in the way of an insurance policy or insurance proof which the insurer issues to the insured, otherwise it is invalid consequently, the contract will be null and void even if it is entered into before a notary under the rules for drawing up agreements in general.

An insurance contract is a principal contract because it is independent of any other obligation, unlike accessory contracts which cannot stand alone in local circulation. An insurance contract is a contract with remuneration as the insurer is obliged to pay the compensation or amount of insurance in case of occurrence of insurance. On the other hand, the insured must pay the insurance premium when receiving the insurance policy. The insurance contract is allied because it is not known when the insurance case may occur.

Insurance contract as a contract of adhesion or accession
          
This means that the terms of this contract are drawn up only by one party, the insurer, in the form of proof of insurance, for all types of insurance contracts and any object being insured, while the other party, the insured, usually has only the right to sign this contract. The fact that the insurance contract is an ad hoc contract also results from the content of Article 1114 of this Code, which provides for the form of this contract and which states, among other things, that the insurance contract is drawn up by proof of insurance that the insurer issues to the insured. It is clear from this provision that this contract is an ad hoc or adherence contract because the only correct way to compile it is through the proof of insurance that the insurer issues to the insured.

Consequently, the question arises. Is the will of the party who does not participate in the drafting of the contract conditions violated?

In this regard, the authors are divided into two groups. Some authors argue that in adhesion contracts, the autonomy of the will of the party that does not participate in the drafting of the contract terms is limited, as this party does not exercise its will in drafting the contract terms but is obliged or not to accept the terms outlined by the other party. The second group of authors, on the contrary, admit that we do not infringe on these contracts autonomy of the will of the party which does not participate in the drafting of the terms of the deal, as, indeed, this party does not exercise the will in the writing of the terms of the contract, but it has the right to add, remove or change some of the terms of the agreement as well as if it does not agree with them, not to conclude the deal.

Personally, I am of the opinion that in ad-thesis contracts we do not infringe on the autonomy of the will of the party which does not draft the terms of the deal, as this party clearly demonstrates its will, whether or not it decides to enter into this contract, even with the right that this party has to add other elements of the contract or to change the previously drafted details, it is understood as any other contract in agreement with the other party. I think that one of the reasons for the provision of this contract is the protection of the weaker party that in this case is the insured party, as not always that party has specialized professional legal knowledge towards the insurer, which is still a legal person, equipped with legal knowledge and consequently a more privileged position.

Also, in order not to allow autonomy to be violated, we must be in conditions of free competition rather than monopoly. The fact is that in Albania, there is currently a large number of private and public insurers. The reason why the lawmaker has foreseen this contract to be an adhesion contract, I think there is a need to create regularity and uniformity in the local circulation. By standardizing this contract, not only is there regularity in the regional flow between the entities subject to this service but also the protection of the legal rights of the insured party, which is weaker than the insured party, is realized. in this contract.

Significance of term in the insurance contract

The insurance contract is, in all cases, a strictly fixed term contract. This characteristic results from the content of Article 1115 of the Civil Code, according to which the insurance proof must contain the beginning and the end of the insurance contract. The term depends on the facility provided, for example: for agricultural products the time is not less than one month, for the buildings of citizens the end is 1-5 years and more. The term in the civil-legal sense is that moment in time when the legal consequences of the contract begin or end.

In the insurance contract, the term is of crucial importance, and the lack of determination of the condition of starting and ending of the deal makes the contract invalid. The most common disease of an insurance contract is one year. However, this term may be more or less than one year; the insurance contract can be concluded at any time of the calendar year.

When the contract is for a period longer than ten years, the parties have the right to waive the expiration of this period, if they notify each other six months before expiry. This contract may be tacitly renewed several times, but any renewal shall not exceed two years (Article 1124, the third paragraph of the Civil Code). The arrangement of life and health insurance cannot be renewed (Article 1124, fourth paragraph).The Civil Code in force does not provide for a maximum term that the parties must comply with to conclude this contract, so the parties are free to terminate an insurance contract providing for a maximum time they wish.

The special moment of entry into force of the insurance contract.

The insurance contract has an extraordinary moment of entry into force. More specifically, it begins to bring legal consequences for both parties from 24:00 on the day when his first premium or installment has been paid, ending on the 24th day of the last day of the term of the contract (Article 1124, paragraph 1 of the Civil Code).
I mentioned the time of entry into force of the insurance contract, as one of its features, for two reasons:
First: Only in this contract is a particular interest the exact time of entry into force, because the commencement of the implementation of this contract is related to the occurrence of the insurance event, which does not depend on the will of the parties at all. And it can happen at any time;
Second: Only in this contract is of particular importance the exact time of termination of the deal, the time which is determined at the moment when the contract is concluded, not only with the exact date but also with hours, minutes and seconds and the precise determination of the contract start and end date, as in any other contract, is a condition of its validity or not.

Voluntary or compulsory insurance contract.
According to our legislation, property and life insurance contract can be in 2 forms:

Voluntary, when the insured by his own free will decides to secure his property or life Obligatory, when it is provided by specific legal provisions that must be compulsorily concluded with the contract of property insurance, e.g. for vehicles, state-owned buildings rented out, insurance in sea transport etc.

Compulsory insurance conditions are set by the government, the finance and economy ministry, the INSIG Insurance Institute, or any other central administration body.

–Cases of Termination of Insurance Contract.

The insurance contract may expire for various reasons. The termination of this contract is, in most cases, sanctioned by legal provisions, and there are also termination cases that result from the general rules of contract law.
Given many of these cases, I will try to analyze them as follows:

• According to the rules of contract law and the rules of this contract, the contract may be terminated by agreement between the insurer and the insured. This is because the contract relates to the will of the parties and cancellation can also be made to their mutual will.
 Because this contract is formal, even the termination of its contract must
is done formally.

• The contract will be valid if it is concluded in compliance with the legal provisions.

• In cases when the insurance contract is concluded for a fixed term, then it will expire at the end of this term. This is valid for both voluntary and compulsory insurance, but especially for optional life or property insurance. If the contract is concluded for an indefinite period, then this contract is terminated when the interested party submits the request.

–Cases of termination of the insurance contract
The insurance contract can be terminated in some cases:
When the insured provides inaccurate and incomplete insurance data, then the insurer is entitled:

1. to seek the termination of the contract if there were such circumstances that if he had known, he would not have concluded the deal. In this case, the insurance premiums until the termination of the contract are required, and in any case, the insurance premium to be paid in the first year of the contract shall not be refunded to the insured (Article 1118, second paragraph of the Civil Code).
2. change the amount of insurance premium, amount of insurance, or term of protection (Article 1118, the first paragraph of the Civil Code)
3. the insurance contract is terminated in cases when the insurance risk ceases to exist after the termination of the agreement, but the insurer has the right to pay the premiums, 1. until the completion of the insurance risk has been notified or otherwise disclosed (Article 1122 of the Civil Code)
4. The insured person must notify all changes of circumstances that he is aware of and which may influence the increase of risk. If the insured does not inform the changes, the insurer has the right to change the insurance measure, insurance amount, term of the insurance or terminate the contract from the moment of increased risk (Article 1123 of the Civil Code).
5. the contractor is obliged to pay the insurer the insurance premium within the terms specified in the contract. If the first premium or installment is not paid on time, the insurance is suspended until 24 hours of the day. The contractor pays the amount due. When the contractor fails to pay the following premiums, according to the set deadlines, the insurance is suspended from 24:00 on the fifteenth day after the expiration of the term, and the insurer has the right to request termination of the contract (Article 1125 of the Civil Code)