The insurer's letter has arrived: it rejects the claim because, in its view, the loss arises from an excluded activity, was reported late, or the insured failed to comply with one of the obligations in the policy conditions. For a private individual, the route in such cases is relatively well known: a complaint, then the Financial Arbitration Board (PBT). Many company managers look for the same ladder – and hit a wall at the second rung, because the Arbitration Board does not accept cases from businesses. As a broker, what I see is that this is the point where the most time and money are lost: weeks go by with submissions sent to the wrong address, while the injured party is waiting for an answer from the company and the limitation clock is ticking. This article sets out, from the company's perspective, what is available, what is not, and which deadlines you need to watch.
- The Financial Arbitration Board (PBT) and the consumer-protection procedure of the MNB (Hungary's central bank and financial supervisor) are open only to consumers – natural persons acting outside their business activity; a kft. (limited liability company), or a sole trader in a matter concerning their business policy, cannot turn to them.
- What is available to a company too: a written complaint to the insurer, to which, under the complaint-handling rules of the Insurance Act (Bit.), you must receive a reasoned reply within 30 days – this step alone often clarifies whether the issue is an exclusion, an exemption of the insurer (the insurer being released from paying) or incomplete documentation.
- If the complaint brings no result, the civil route remains: up to HUF 3 million, a payment order issued by a notary (this is the compulsory starting point); above HUF 30 million, a lawsuit in court; in between, either of the two; alongside these, mediation or – if the contract provides for it – arbitration; the deadline is set by the limitation period laid down in the policy conditions, which is often shortened.
Why not the Arbitration Board? The definition of a consumer
The Financial Arbitration Board (PBT) is a free dispute-resolution forum operating alongside the MNB (Hungary's central bank and financial supervisor), which deals with contractual disputes between a financial service provider and a consumer. According to the MNB's guidance, a consumer is 'a natural person acting for purposes outside their independent profession or business activity'. Two things follow from this. A kft., bt. or zrt. (Hungarian limited liability company, limited partnership or private company limited by shares) is never a consumer, so it cannot turn to the PBT. A sole trader is a natural person, but business liability insurance falls within their business activity, so they cannot turn to it with that contract either – though they can with their private home or motor insurance. In liability claims, then, conciliation as a step is practically out of reach for companies, and it is worth knowing this as soon as you receive the rejection letter, not weeks later from a rejected PBT application.
First step: a written complaint to the insurer – 30 days
What a company does have is the insurer's own complaint-handling procedure. The complaint-handling rules of the Insurance Act (Bit.) allow every client – not only consumers – to complain about the insurer's conduct, decision or omission, and the insurer must give a reasoned reply to a written complaint within 30 days. It is worth writing the complaint not in anger but with the policy conditions beside you: which clause the rejection relies on, why in your view it does not stand, and which document supports this. This is often the point where it becomes clear whether the dispute is a real one. If the insurer relies on an exclusion, what needs checking is whether the loss really falls within the excluded scope; if the insurer relies on exemption – that is, claims it is released from paying, for example because of gross negligence – the burden of proof is on the insurer, and you can hold it to that in the complaint. If the reason is incomplete documentation, supplying the missing documents is often a shorter route than a complaint – the article on supplying missing documents covers this in detail. The typical reasons and how to prevent them are collected in the article on common reasons for rejection. The reply to the complaint is valuable even if it is negative: the insurer's position is recorded in writing, with reasons, and every later step builds on it.
The MNB: for whom, for what – and for what not
The Magyar Nemzeti Bank launches a consumer-protection procedure at the request of consumers if the provider has not replied to their complaint or has breached a consumer-protection rule. This is not the company's route, for two reasons. First, here too only a consumer can be the applicant. Second – and consumers often misunderstand this too – the MNB does not decide individual contractual disputes: according to its guidance, 'the MNB does not conduct official proceedings in individual contractual disputes'; it does not rule on whether a specific loss is an insured event, whether the case is a consumer's or a company's. A company can therefore notify the MNB if, in its view, the insurer is acting unlawfully in a systemic way – for example, not replying to complaints at all – but it cannot expect this to decide its own claims dispute. For settling a company's legal dispute, the MNB's guidance itself points to the civil courts.
Court, payment order, mediator, arbitration
If the complaint brings no result, the dispute between the company and the insurer is a civil-law dispute, and its ordinary route is the court. The form depends on the size of the monetary claim. Under Section 3 of Act L of 2009 on the payment order procedure, an overdue monetary claim not exceeding HUF 3 million can be enforced only by way of a payment order issued by a notary; a claim exceeding HUF 30 million, on the other hand, cannot be enforced this way and must be brought before the court with a statement of claim. In between, you can choose. A payment order is a simple and inexpensive start, but do not expect more from it than it is: if the insurer files an objection – which is typical in a disputed claim – the procedure turns into a lawsuit. In the lawsuit, legal representation is compulsory in cases that belong before the regional court (törvényszék) – those worth more than HUF 30 million – but not before the district court (járásbíróság); in a coverage dispute, however, it is hard to manage without it in practice; the burden of proof – experts, documents, witnesses – lies with each party for its own assertions. This is the point where it is worth thinking through the chances and the costs with a lawyer, because in a liability insurance dispute what is at stake is often not the amount of the loss but the interpretation of the cover. Two further routes exist. Mediation, under Act LV of 2002 on mediation, is voluntary: it only works if the insurer is also willing, but in return it can be shorter and cheaper than a lawsuit and can end in a settlement. Arbitration may come into play if the insurance contract contains such a clause, or if the parties agree to it separately after the dispute has arisen – in Hungarian SME policy conditions such a clause is rare, but it does occur in larger, bespoke contracts; check this in your own policy. If the company has legal protection insurance, some policy conditions also cover disputes relating to insurance contracts, in which case a lawyer paid by the insurer can help – this varies from insurer to insurer; the article on how legal protection and liability insurance relate explains this in detail.
The deadlines: limitation and the injured party's side
Time does not stand still during the 30 days of the complaint. The general limitation period under the Hungarian Civil Code (Ptk.) is five years, but insurance policy conditions – on the basis of a Ptk. rule that permits this, in writing – typically stipulate a shorter limitation period of one or two years for claims arising from the insurance contract, and the starting point is often linked to the notification of the insurer's decision or to the date the claim fell due. This depends on the policy conditions, so when you receive the rejection letter, the first task is to look up the limitation clause in your own conditions. Under the Ptk. in force, neither a complaint nor a demand for payment interrupts the limitation period (a written demand has not been a ground for interruption since 2014); it is interrupted by the insurer's acknowledgement of the debt, by a settlement, or by enforcing the claim through legal proceedings, by a payment order or a lawsuit. The other deadline is the injured party's: the fact that the insurer has rejected the claim does not end the company's liability towards the injured party. The injured party pursues you, and if the company acknowledges or pays the loss without the insurer's consent, this may weaken its claim against the insurer under the policy conditions – the article on settlements covers this. In practice, therefore, two matters have to be handled in parallel: towards the injured party, communication without stalling but without acknowledging the loss; towards the insurer, the complaint and, if necessary, legal action.
What should you do now?
Read the reasons for the rejection together with the policy conditions, and note down the clauses referred to. Look up the part of the conditions on limitation and legal disputes, and write down the deadline. Send the insurer a written complaint, rebutting the reasoning point by point and attaching the evidence; until the reply, due within 30 days, arrives, keep in contact with the injured party in writing, but without acknowledging the loss. If the reply to the complaint is also negative, decide between a payment order and a lawsuit according to the size of the claim, and bring in a lawyer for this – as a company, time spent on the Arbitration Board and the MNB will not produce a decision. If you let me know, I help where I can in a stuck or disputed case: in a claim, the primary route is the insurer's claims line, I do not take on legal representation, and a separate article covers the limits of the broker's role.
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Sources
- MNB – Financial complaints (Pénzügyi panasz): guidance on complaint handling, the Financial Arbitration Board and the MNB's consumer-protection procedure (definition of a consumer, 30-day reply, individual contractual disputes)
- Financial Arbitration Board (Pénzügyi Békéltető Testület, MNB)
- Insurance Act (Bit., Act LXXXVIII of 2014) – complaint handling, 30-day reply deadline
- Act L of 2009 on the payment order procedure – Section 3 (HUF 3 million and HUF 30 million thresholds)
- Act LV of 2002 on mediation
- Hungarian Civil Code (Ptk., Act V of 2013) – general rules on limitation
- Code of Civil Procedure (Pp., Act CXXX of 2016) – Section 20(3)(a)(aa): regional court above HUF 30 million; Section 72(2)(a): no mandatory lawyer at district court
- Act LX of 2017 on arbitration (Vbt.) – Section 8 (an arbitration agreement may also be concluded as a separate agreement)
