The insurance contract: a contract of adhesion

Insurance contracts are often referred to as “contracts of adhesion. Unlike a conventional contract, whereby the parties freely negotiate all the terms, an insurance contract is a standardized model proposed by the insurer. The policyholder has no opportunity to discuss or amend all the terms of the contract. He or she adheres to pre-established conditions, finalized between the insurance regulator and an insurer.

This dissymmetry between the various parties involved in the contract is even more obvious when underwriting an insurance policy is compulsory, such as in motor third-party liability insurance.

By compelling the insured to sign up a contract with no say in its term, the State has a duty to provide them with a certain level of protection." The supervisory authorities are committed to protecting policyholders against any abuses by the insurer and to restoring balance to the relationship between an insurance professional and a non-professional one.

The role of the supervisory authorities is not limited to that of "financial policemen". Their mission also encompasses monitoring insurers' solvency and verifying their ability to honor their obligations to the insured.