In this paper, the authors present and analyse the regulatory framework of out-of-court insurance dispute resolution through the European consumer protection regulations under Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative dispute resolution. In view of the fact that Directive 2013/11/EU stipulates out-of-court resolution of disputes concerning contractual obligations that stem from service contracts, its application on insurance as a service is evident. Specific objectives that ensure a higher level of consumer protection, pursuant to Regulation (EU) No 254/2014 on multiannual consumer programme, and promote alternative resolution of disputes and better and easier access to simple, efficient and expedient legal protection and out-of-court settlement of consumer disputes have a significant legal effect on the exercise of rights from the insurance contract as a consumer contract.
Out-of-court dispute resolution is simple, efficient, expedient and low-cost, and due to its advantages in application and its role as an instrument of consumer protection it has a positive effect on insurance dispute resolution. In comparing certain regulations based on EU legislation with the solutions within the national legislation, the authors primarily refer to the provisions of Article 89 of the Insurance Act on pre-contractual obligation of the insurer to provide information to the policy-holder on the ways of settling potential disputes and initiate the procedure of out-of-court dispute resolution between the insured, that is, policyholder/consumer and the insurance company, i.e. insurance provider. The aim of the above mentioned provision is to ensure out-of-court resolution of insurance disputes in a peaceful manner.
Due to the overburdened judicial system and lengthy court proceedings as a regular method of legal protection, out-of-court insurance dispute resolution is of special interest to the Republic of Croatia. In fact, the annual intake of damages claims on the grounds of motor vehicle third party liability insurance emphasises all the more the advantages of using the mechanisms of out-of-court dispute resolution as an optional, flexible and reliable procedure, the cheapest and quickest mode of settlement of insurance disputes. For that reason, the authors analyse the relevant legal regulations by means of which the Act on Compulsory Traffic Insurance under Article 12 prescribes a 60-day time limit, from the day the damages claim was received, within which the insurer has to settle the claim anticipating a peaceful settlement of the claim by way of out-of-court dispute resolution.
The strengthening of consumers’ position in the contractual relationship with the insurer as a provider of financial services is especially evident in the comparative analysis of the conditions for compulsory motor vehicle third party liability insurance, particularly in relation to the provisions on out-of-court resolution of disputes. Having analysed the aforesaid provisions on the conditions for compulsory motor vehicle third party liability insurance from a number of insurance companies, the authors have come to the conclusion that uniform contents of the insurance contractual correlation via an out-of-court resolution of insurance disputes ensure consumer protection in insurance services. By pointing to European legal principles and practices concerning the settlement of most damages claims by out-of-court dispute resolution, the authors highlight the importance of out-of-court insurance dispute resolution, concluding that the aforementioned procedure in the national legal system has been harmonized with European standards of consumer protection. As a result, consumers as the key factor in the national economy can now have more trust in the insurance market, and at the same time, a contribution has been made to the creation of a uniform European insurance market.
