New digital consumer protection rules for insurers
This update provides an overview of these amendments to the Danish Insurance Contracts Act.
The amendments, which implement EU Directive 2023/2673 on Distance Financial Services Contracts, introduce, among other things, a mandatory online withdrawal function, expanded pre-contractual disclosure obligations, Danish language requirements in certain instances, a new duty to provide comprehensive explanations, and a prohibition against certain manipulative online design practices.
Online withdrawal function and prolonged withdrawal period - Section 34j
The amendments introduce two key changes to the withdrawal regime for insurance contracts entered into via an online interface:
- First, insurers must implement a mandatory online withdrawal function where insurance contracts are entered into via an online interface. The function must be clearly visible, continuously accessible throughout the withdrawal period, labelled with a clear wording such as "Fortryd aftale", and allow the consumer to identify the insurance contract and submit the withdrawal electronically. Confirmation must be provided on a durable medium without undue delay.
- Second, if the consumer has not received the mandatory pre-contractual information and the contractual terms and conditions, the withdrawal period will not expire until 12 months and 14 days after the conclusion of the insurance contract (provided that the consumer has received information on the right of withdrawal).
Expanded pre-contractual information requirements - Section 34e(1)
The amendment expands the information that must be provided before an insurance contract is entered into via online channels.
In addition to existing requirements, insurers must - where relevant - disclose:
- The consequences of late or missed payments.
- Whether pricing has been personalised through automated decision-making.
- Any environmental or social objectives integrated into the investment strategy underlying the insurance product.
Insurers must also provide clearer contact details, including telephone number and email address, and specify where complaints may be submitted.
The amendment introduces the possibility for insurers to "layer" the mandatory pre-contractual information when given by electronic means, see Section 34e(6).
The amendment also imposes a requirement on insurers to provide, upon request, the mandatory pre-contractual information in an appropriate and accessible format to consumers with disabilities, including those with a visual impairment, see Section 34f(1).
Obligation to remind consumers of right of withdrawal - Section 34e(2)
The amendment introduces a new reminder requirement where the mandatory pre-contractual information is provided less than 24 hours before the consumer becomes bound by the insurance contract.
In such cases, the insurer must, within one to seven days after the insurance contract has been entered into, send a reminder on a durable medium. The reminder must clearly explain the consumer's right of withdrawal and how it can be exercised.
Obligation to inform consumers that telephone conversations can or will be recorded - Section 34e(3)
In addition to the existing information requirements when insurers call consumers with the intent of selling insurance, insurers must now also inform consumers if a telephone conversation can or will be recorded.
Duty to provide adequate explanations - Section 34f(4)–(7)
A new Section 34f(4)–(7) introduces a duty for insurers to provide comprehensive explanations before an insurance contract is entered into.
Insurers must ensure that consumers receive explanations enabling them to assess whether the proposed insurance contract is suited to their needs and financial situation. The explanation must include:
- The mandatory pre-contractual information.
- The key characteristics of the insurance product.
- The specific consequences of the agreement, including the consequences of non-payment.
Where insurers use automated online tools (such as chatbots or interactive modules), consumers must have access to personal assistance during the insurer’s business hours prior to - and in justified cases after - entering into the insurance contract.
Importantly, the insurer bears the burden of proof that the explanation and assistance requirements have been fulfilled.
Danish language requirement - Sections 34e(5) and 34f(6)
The amendment introduces a statutory language rule.
Where an insurance product has been marketed in Danish, the mandatory pre-contractual information must also be provided in Danish - unless the consumer expressly consents to another language.
Where the insurance product has been marketed in Danish, the personal assistance provided to consumers must be provided in Danish - unless the consumer expressly consents to another language.
Prohibition against manipulative online interface design - Section 34b(3)
A new Section 34b(3) prohibits insurers, when entering into insurance contracts via online channels, from designing or operating online interfaces in a way that causes certain choices to appear more prominent when the consumer is required to make a decision.
Consequences for insurers
Together, these amendments strengthen the regulatory focus on insurers’ digital distribution models and consumer protection. Insurers should review their digital sales journeys to ensure timely compliance. In practice, insurers should ensure that:
- Acceptance and purchase options are not visually emphasised at the expense of alternative choices.
- Cancellation and withdrawal options are not hidden or made more burdensome.
- Digital flows do not distort or impair the consumer’s ability to make a free and informed decision.
Further, the statutory language requirement may have implications for cross-border business models targeting Danish consumers. Insurers operating English-language digital platforms but directing Danish-language marketing at Danish consumers will need to comply with this requirement and ensure that proper consent mechanisms are in place if they wish to provide the mandatory pre-contractual information and maintain the customer relationship in a language other than Danish.
Do you want to know more?
If you have any questions regarding the new amendments, please contact Plesner's Insurance and Pension Law team.