S.L. 403.10 Art. 3Statutory notice.

(1) No insurer shall enter into a long term business contract unless that insurer serves upon the other party a statutory notice in relation to that contract at the time when the contract is entered into.

(2) A statutory notice is a notice which:

(a) in relation to long term business contracts, other than linked long term contracts of insurance, contains such matters (and no others) and is in the form set out in the First Schedule and complies with the requirements specified in the following subregulations; subregulations; and

(c) in each case, has annexed to it a form of notice of cancellation as set out in the Third Schedule.

(3) (a) In the case of a long term business contract, where Malta is the country of commitment, a statutory notice shall be made out in the Maltese and English languages.

(b) In the case of a long term business contract where Malta is not the country of commitment, the statutory notice shall be made out in the language of the country of the commitment, or in any other language agreed to by the parties.

(4) A statutory notice shall be easily legible and shall, as nearly as practicable, be a reproduction of that set out in the First or Second Schedule, as the case may be, (and, in so far as it relates to the notice of cancellation, that set out in the Third Schedule), whether as respects size, colour, print, the use of capitals or bold lettering and other means of emphasis.

(5) For the purpose of paragraph (1) of the form set out in the said First or Second Schedule the reference to a name shall be deemed to include a reference to the description or title of the person concerned.

(6) An insurer who contravenes any of the provisions of this regulation shall be guilty of an offence and shall be liable, on conviction, to a fine (multa) of not less than one thousand euro (€1,000) and not exceeding one hundred and fifty thousand euro (€150,000); but, without prejudice to regulation 4(2), no long term business contract shall be invalidated by reason of the fact that the insurer has contravened this regulation in relation to that contract.

(7) Subregulation (1) shall not apply to -

(a) long term business contracts for which the policyholder is not an individual;

(b) long term business contracts for which the policyholder, or if there is more than one policyholder, at least one of the policyholders, is neither a person on whose life the contract is made nor the spouse or minor child of such a person;

(c) contracts of term insurance into which the policyholder is required to enter in order to obtain credit or loan facilities and such requirement is shown by documentary evidence referred to or attached with the proposal: Provided that this paragraph shall not apply when the credit or loan facility is to be granted by an individual;

(d) long term business contracts of six months’ duration or by an insurer in relation to any contract to which regulation 3(1)

applies, may, within a period of thirty days beginning from the date on which such notice has been served, serve on the insurer a notice of cancellation which complies with subregulation (3).

(2) A person to whom an insurer ought to have, but has not, served a statutory notice in relation to any such contract as aforesaid may, before the lapse of one year beginning from the date of contract, serve a notice of cancellation on the insurer. If, however, the insurer serves a statutory notice upon such person in relation to that contract before such latter person has served a notice of cancellation under this subregulation, then, without prejudice to his right to serve a notice of cancellation under subregulation (1), the right of such latter person to do so under this subregulation shall cease.

(3) A notice of cancellation may, but need not, be in the form annexed to the statutory notice, and shall have effect if, however expressed, it indicates the intention of the person serving it to withdraw from the transaction in relation to which the statutory notice was or ought to have been served. Save as aforesaid, the requirements applicable to the statutory notice shall mutatis mutandis apply to a notice of cancellation.

(4) Where a person serves a notice of cancellation, the notice shall operate so as to:

(a) cancel the contract as if that contract was never issued or signed by the insurer; and

(b) have the effect of releasing a person from any future obligation arising from the contract.

(5) Where a notice of cancellation operates to cancel a contract, then -

(a) any money which the person serving the notice has paid in connection with the contract (whether by way of premium or otherwise, and whether to the insurer or to a person who is the agent of the insurer for the purpose of receiving the money) shall be recoverable from the insurer by the person serving the notice;

(b) any benefit under the policy which the insurer has paid to the person serving the notice shall be refunded by such person to the insurer;

(c) any adverse market movement in the value of the property represented by a linked long term contract of insurance shall be borne by the party serving the notice of cancellation.

(2) For the purpose of regulation 4, a notice of cancellation shall be deemed to be served on the insurer if it is sent by registered post to the person specified on the statutory notice at the address specified also thereon.

(3) Notwithstanding the provisions of subregulations (1) and (2), a statutory notice or a notice of cancellation, as the case may be, may be served on the other party, or the representative of the other party, by any other manner whatsoever:

Provided that, other than serving by a judicial manner or registered post, the party receiving the notice shall sign the receipt of acknowledgement which has to indicate the date of signature and surrender such receipt to the party serving the notice.

(4) For the purpose of these regulations, the date on which a statutory notice or a notice of cancellation, as the case may be, shall be deemed to be served on the other party -

(a) when served by registered post -

(i) in respect of a statutory notice, shall be the first working day following the day of posting; and

(ii) in respect of a notice of cancellation, shall be the day of posting; and

(b) when served by any other manner, save a judicial manner, shall be the date on the receipt of acknowledgement.

(5) In the event that the insurer alleges that the right of cancellation has not been exercised by the party within the periods established by these regulations, the burden of proof shall lie with the insurer.