Judgment;Summary — ECLI:EU:C:2020:273
Date: 2020-04-02
Language of the case: German
Court formation: Eighth Chamber
Subject matter: Right of establishment;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Austria

summary, it 
argued that the cancellation declared by it of the life assurance policy concluded 
for the company was based on the provisions of Paragraphs 5b and 165a of the 
VersVG, because it had not been properly informed of its rights of cancellation. 
Pursuant to the provisions of Directives 90/619/EEC and 92/96/EEC, every policy 
holder must have a period of between 14 and 30 days from the time when he was 
informed that the contract had been concluded within which to cancel the contract. 
Pursuant to the directives, arrangements for application of the cooling-off period 
had to be provided before the contract was [Or. 4] concluded. In the judgment in 
Case C-209/12, the Court of Justice clarified that, to ensure the effectiveness of 
the directive, it was necessary for national provisions that provided for expiry of 
the right of cancellation even without (properly) informing the policy holder in 
advance to be impermissible. The Austrian legislature regulated the right of 
cancellation under Paragraph 165a of the VersVG in implementation of the 
provisions from the directives. The life assurance directives did not contain any 
restrictions whatsoever to the effect that, a trader as the policy holder did not have 
a right of cancellation or that the cancellation period should end irrespective of 
whether information had been provided in the proper manner. Although the 
applicant as the policy holder was not a consumer, the insured person certainly 
had to be regarded as a consumer. 
The information pursuant to Paragraph 165a of the VersVG had been incorrect, 
because it impermissibly made the right of cancellation subject to a requirement 
for written form. 
The defendant sought to have the action dismissed and, in summary, argued — in 
so far as relevant here — that the applicant had been correctly informed of its 
rights of cancellation pursuant to Paragraphs 5b, and 165a of the VersVG. Merely 
citing a requirement for written form — which was ultimately beneficial to the 
policy holder itself and served to provide legal certainty — did not make the 
information incorrect. For traders such as the applicant, the cancellation period 
provided for in Paragraph 165a of the VersVG expired entirely irrespective of 
whether information has been provided in relation thereto. The insured person’s 
status as a consumer was irrelevant, because only the policy holder had the right 
of cancellation. [Or. 5] 
III. Previous proceedings 
The court of first instance dismissed the forms of order sought and argued, inter 
alia, that — at best — incorrect information regarding the right of cancellation 
under Paragraph 165a of the VersVG could not lead to an indefinite right of 
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cancellation in the case of a trader as the policy holder, because such a ‘perpetual’ 
right of cancellation had its basis in consumer protection. 
This is opposed by the appeal of the applicant, which argues, inter alia, that the 
directives do not make an express distinction as to the policy holder’s status as a 
consumer. A right of cancellation within the meaning of the decision of the Court 
of Justice in Case C-209/12 must therefore be conferred on every policy holder of 
an individual life assurance contract. 
In its response to the appeal, the defendant points out that the spirit and purpose of 
the right of cancellation provided for in the directives was consumer protection, 
meaning that, with regard to a policy holder that was not a consumer, the right of 
cancellation under Paragraph 165a of the VersVG begins to run irrespective of the 
existence of information provided in the proper manner. 
IV. Legal basis 
The provisions of EU law and Austrian law that come into consideration as being 
relevant on the basis of the time of conclusion of the contract, on 27 April 2005, 
read as follows: 
1. EU law: 
Directive 2002/83/EC of the European Parliament and of the Council of 
5 November 2002 concerning life assurance: 
Recitals: [Or. 6] 
‘(3) It is necessary to complete the internal market in direct life assurance, from 
the point of view both of the right of establishment and of the freedom to provide 
services in the Member States, to make it easier for assurance undertakings with 
head offices in the Community to cover commitments situated within the 
Community and to make it possible for policy holders to have recourse not only to 
assurers established in their own country, but also to assurers which have their 
head office in the Community and are established in other Member States. [...] 
(45) For life assurance contracts the policy holder should be given the 
opportunity of cancelling the contract within a period of between 14 and 30 days. 
[...] 
(52) In an internal market for assurance the consumer will have a wider and more 
varied choice of contracts. If he/she is to profit fully from this diversity and from 
increased competition, he/she must be provided with whatever information is 
necessary to enable him/her to choose the contract best suited to his/her needs. 
This information requirement is all the more important as the duration of 
commitments can be very long. The minimum provisions must therefore be 
coordinated in order for the consumer to receive clear and accurate information 
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on the essential characteristics of the products proposed to him/her as well as the 
particulars of the bodies to which any complaints of policy holders, assured 
persons or beneficiaries of contracts may be addressed.’ 
Articles 35 and 36: 
‘(1)  Each Member State shall prescribe that a policy holder who concludes an 
individual life-assurance contract shall have a period of between 14 and 30 days 
from the time when he/she [Or. 7] was informed that the contract had been 
concluded within which to cancel the contract. 
The giving of notice of cancellation by the policy holders shall have the effect of 
releasing them from any future obligation arising from the contract. 
The other legal effects and the conditions of cancellation shall be determined by 
the law applicable to the contract as defined in Article 32, notably as regards the 
arrangements for informing the policy holder that the contract has been 
concluded. 
(2) The Member States need not apply paragraph 1 to contracts of six months’ 
duration or less, nor where, because of the status of the policy holder or the 
circumstances in which the contract is concluded, the policy holder does not need 
this special protection. Member States shall specify in their rules where 
paragraph 1 is not applied. 
Article 36 
Information for policy holders 
(1) Before the assurance contract is concluded, at least the information listed in 
Annex III(A) shall be communicated to the policy holder. […]’. 
Annex III: 
‘Information for policy holders 
The following information, which is to be communicated to the policy holder 
before the contract is concluded (A) or during the term of the contract (B), must 
be provided in a clear and accurate manner, in writing, in an official language of 
the Member State of the commitment. […] [Or. 8] 
A. Before concluding the contract 
Information about the commitment […] 
a.13 Arrangements for application of the cooling-off period’ 
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2. Austrian law: 
A. Versicherungsvertragsgesetz (Law on insurance contracts, ‘the VersVG’) 
Paragraph 165a of the VersVG in the version BGBl. No 62/2004 (applicable to 
contracts concluded between 1 October 2004 and 31 December 2006 pursuant to 
Paragraph 191c(6) and (8) of the VersVG): 
‘(1) The policy holder is entitled, within 30 days after the contract has been 
concluded, to withdraw therefrom. If the insurer has granted provisional cover he 
is entitled to the premium corresponding to the duration thereof. 
(2)  If the insurer has not complied with the obligation to disclose its address 
(Point 1 of Paragraph 9a(1) of the VAG), the period for cancellation under 
Subparagraph 1 does not begin to run before the policy holder has been informed 
of this address. 
(3) The above subparagraphs do not apply to group insurance policies and to 
policies with a duration of six months or less.’ 
B. Versicherungsaufsichtsgesetz (Law on the supervision of insurance 
undertakings, ‘the VAG’) 
Paragraph 9a of the VAG in the version BGBl. No 447/1996 (valid from 1 August 
1996 to 9 December 2007): 
‘(1) In the event of conclusion of an insurance policy relating to a risk situated in 
Austria, prior to submission of his contractual declaration the policy holder must 
be informed in writing of [Or. 9]  
1. the name, the address of the head office and the legal form of the insurance 
company, and, where appropriate, of the branch concluding the contract; […] 
6. the circumstances in which the policy holder can cancel the conclusion of the 
insurance policy or withdraw therefrom. [...] 
(3) If, owing to the manner in which the contract is concluded, it is not possible 
to inform the policy holder in writing prior to submission of his contractual 
declaration, the obligation to provide information shall be fulfilled by virtue of the 
policy holder receiving the information together with the policy document at the 
latest. 
(4) In any event, the information pursuant to Point 1 of Subparagraph 1 must 
also be stated in the insurance application and the policy document and all other 
documents granting cover. […]’. 
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V. Grounds of the question referred 
Based on the following considerations, the referring court has doubts as to 
whether the statements made by the Court of Justice of the European Union (‘the 
Court of Justice’) in the Endress judgment (Case C-209/12) also relate to policy 
holders who are not consumers: 
1. In Case C-209/12 (Endress) the Court of Justice ruled that Article 15(1) of 
Council Directive 90/619/EEC of 8 November 1990 on the coordination of laws, 
regulations and administrative provisions relating to direct life assurance, laying 
down provisions to facilitate the effective exercise of freedom to provide services 
and amending Directive 79/267/EEC, as amended by Council Directive 
92/96/EEC [Or. 10] of 10 November 1992, read in conjunction with Article 31 of 
the latter directive, must be interpreted as precluding a national provision under 
which a right of cancellation lapses one year at the latest after payment of the first 
premium, where the policy holder has not been informed about the right of 
cancellation. The point of departure for the request for a preliminary ruling was 
the German provision in Paragraph 5a of the VVG, under which the right to object 
would in any event lapse one year after payment of the first premium, irrespective 
of whether the policy holder had been properly informed about his right of 
cancellation. 
The Court of Justice stated that the second and third life assurance directives — 
just like the successor legislative act, Directive 2002/83/EC at issue here — do not 
regulate the case in which the policy holder was not informed about his right of 
cancellation or, consequently, the effect that that lack of information could have 
on that right, but the third subparagraph of Article 15(1) of Directive 90/619/ECC 
(worded almost identically to Article 35(1) of Directive 2002/83/EC) provided 
that the conditions of cancellation are to be determined by national law 
(paragraph 22). The Member States were therefore, indeed, entitled to adopt rules 
(and provide for restrictions) relating to the precise procedure for exercising the 
right of cancellation, but were required to ensure the effectiveness of the second 
and third life assurance directives, taking account of their aims. The Court went 
on to cite recital 23 of the third life assurance directive, which is worded almost 
identically to recital 52 of Directive 2002/83/EC, and thus seeks to have the 
consumer [Or. 11] provided with comprehensive information (paragraph 23 et 
seq). 
The Court of Justice then cited the Heininger decision (Case C-481/99) and stated 
that it had already ruled in that decision that if the consumer was not aware of the 
existence of the right of cancellation, he would not be able to exercise that right. 
While there were significant differences between Directive 85/577 to protect the 
consumer in respect of contracts negotiated away from business premises, which 
was relevant in the Heininger case, and the second and third life assurance 
directives, the risks connected, for the consumer, with the conclusion of a contract 
away from the business premises of the other contracting party, first, and those 
connected, for the policy holder, with the conclusion of an insurance contract in 
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the absence of information in accordance with the requirements under Article 31 
of the third life assurance directive, read in conjunction with Annex II to that 
directive, secondly, were similar. This was because the policy holder was at a 
disadvantage vis-à-vis the insurer, a situation which is similar to that of a 
consumer concluding a contract away from business premises, because insurance 
contracts are legally complex financial products, capable of differing considerably 
depending on the insurer offering those products and of involving significant and 
potentially very long-term financial commitments (paragraph 27et seq). 
2. In decision 7 Ob 107/15h, the Austrian Oberster Gerichtshof (Supreme 
Court, OGH) stated that, based on an interpretation of Paragraph 165a of the 
VersVG in the version BGBl. No 2004/62, which is also applicable here, in 
accordance with the directives and taking account of the statements made in the 
Endress judgment, the policy holder had an [Or. 12] indefinite right of 
cancellation on account of receiving incorrect information (in that case: 14 days 
instead of 30 days). The OGH likewise gave due consideration to consumer 
protection concerns in that decision. 
3. Although EU law does not have a uniform notion of ‘consumer’, and instead 
defines it differently from legal act to legal act, it can be gathered, as a common 
denominator, from the majority of the legal acts on consumer protection that the 
consumer is a natural person who, in his market activities, does not act for 
professional or commercial purposes (thus only for private purposes) […]. It 
follows that the applicant, as a legal person, may not in any event be regarded as a 
consumer. 
4.1. Berger/Maderbacher […] point out that the right of cancellation provided 
for in the life assurance directives does not make an express distinction as to the 
policy holder’s status as a consumer; rather, there is provision for a right of 
cancellation for each individual life assurance contract. However, the directives 
appear to presuppose that the policy holder of an individual life assurance contract 
has the status of consumer. Since the entry into force of the third life assurance 
directive, however, it has been possible for Member States to exclude the right of 
cancellation in cases in which, because of the status of the policy holder or the 
conditions in which the contract was concluded, the holder does not need special 
protection. Any restriction of the personal scope of application of the right of 
cancellation must in any event be provided for by law. 
Caks […] states that both the EU legislature and the Court of Justice do not appear 
to be entirely [Or. 13] clear about whether the rights arising from the life 
assurance directive are supposed to apply to consumers only or to all policy 
holders in general. Although mention is made of ‘consumers’ in some of the 
recitals, elsewhere the directive refers to the ‘policy holder’ without making a 
distinction. The Court of Justice referred to ‘consumers’ several times in the 
Endress judgment, but clearly equated them with policy olders as far as the 
purpose of the directive was concerned. 
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4.2. Other voices in the literature emphasise that the life assurance directives do 
not distinguish between traders and consumers with regard to the right of 
cancellation provided for in those directives, but rather focussed solely on policy 
holders […]. On this basis, the statements made in the Endress case must also 
apply to all policy holders who are traders […].  
5. The provision of Paragraph 165a of the VersVG in the version applicable 
here does not make a distinction between traders and consumers, but rather 
confers the right of cancellation provided for on all policy holders without 
distinction. According to the wording in the text of the law, the 30-day period 
provided for in Paragraph 165a(1) begins to run even if the policy holder has not 
been (properly) informed of his right of cancellation. Only in subparagraph 2 — 
which is not however relevant to the present case — is there provision to postpone 
the beginning of the 30-day period where the insurer does not comply with its 
obligation to disclose its address. [Or. 14]  
6. According to the statements made by the Court in the Endress judgment, a 
provision under national law providing for the lapse of the right of cancellation 
even if the policy holder has not been informed of the right of cancellation 
contradicts the provisions of EU law. 
6.1. The following arguments militate in favour of the assumption that these 
statements also apply if the policy holder is not a consumer: 
The provisions of the life assurance directives do not distinguish between 
consumers on the one hand and traders on the other hand, but generally only 
mention ‘policy holders’ (for instance recital 45 and Article 35). The fact that this 
term can also encompass legal persons is clear from, for instance, Article 1(1)(g) 
of Directive 2002/83/EC (‘if the policy holder is a legal person’) and, a contrario 
sensu, from Article 32(2) of that directive (‘Where the policy holder is a natural 
person’). 
The Endress decision mentions ‘policy holder’ without distinction — even if 
reference is made to ‘consumer’ several times — when answering the question 
referred. 
6.2. The following arguments militate against the assumption that these 
statements also apply if the policy holder is not a consumer: 
In the Endress judgment, the Court refers to consumer protection arguments on 
several occasions and stresses the policy holder’s weak position, comparable to 
that of consumers. 
It is clear from recital 52 of Directive 2002/83/EC that a central objective of the 
directive consists in providing consumers with whatever information is 
necessary — including, [Or. 15] in particular, that relating to their right of 
cancellation. 
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Article 35(2) of that directive expressly provides for the possibility — not put to 
use by Austria in the period relevant here — for Member States to decide not to 
apply paragraph 1 where, because of the status of the policy holder or the 
circumstances in which the contract is concluded, the policy holder does not need 
this special protection. 
7. Overall, therefore, the referring court has doubts as to whether the 
statements made by the Court in the Endress case are also applicable in the 
present case, in which the policy holder is not a consumer, but rather a trader. This 
question will predetermine the outcome of the case to be examined here. 
[…] [stay of proceedings] 
[…] [national procedural law] 
Oberlandesgericht Wien 
1011 Vienna, […] 
[…] on 20 December 2018 
[…]