Article on pan-Baltic insurance system

The topic of insurance premiums is of a central and crucial relevance in insurance matters as the payment of the insurance premiums corresponds to the assumption of insurance risk

by the insurer. An insurance premium is the price of risk – pretium periculi. Non-payment of insurance premiums may, in certain cases, cause the insurer to be released from the obligation to perform. Hence, it is the most important principal obligation of the policyholder. Currently, the regulation concerning the payment of insurance premiums varies significantly across the EU Member States and there are different approaches to the protection of the rights of the policyholder. However, such a situation renders it difficult to provide cross-border insurance services. Moreover, the citizens of the European Union may have difficulties in understanding the obligations arising out of the legislation of the country they plan to move to for employment. This article explores the differences between the Estonian Law of Obligations Act, the Latvian Insurance Contract Law and the Lithuanian rules contained in the Civil Code and the Insurance Law in comparison with the Principles of European Insurance Contract Law with regards to the insurance premium payment regulation. The authors believe that, compared with national laws, the relevant regulation provided in the Principles of European Insurance Contract Law to a certain extent is more favourable and consumer-friendly for policyholders than the domestic law of the Baltic States.