The Danish Guarantee Fund for Non-Life Insurers wins important Supreme Court Case

The Norwegian Guarantee Scheme for Non-Life Insurance initiated legal proceedings against the Danish Guarantee Fund for Non-Life Insurers in 2019. The claim was that Denmark should cover Norwegian industrial injury claims arising from the bankruptcy of the Danish insurance company Alpha Insurance. The Danish Supreme Court has now ruled in favour of Denmark. According to the Director of the Danish Guarantee Fund, the judgment is important and of fundamental significance.

The reason why the Norwegian guarantee scheme decided to sue the Danish Guarantee Fund was its view that the Danish Guarantee Fund should cover compensation claims from Norwegian policyholders who had taken out industrial injury insurance in Norway with Alpha Insurance. The company went bankrupt in 2018.

The Danish Supreme Court has now upheld the High Court's judgment of December 2021, confirming that the costs incurred in Norway are not to be borne by the Danish Guarantee Fund.

“This is a very important ruling for the Danish Guarantee Fund. The judgment confirms that Norwegian industrial injury insurance does not fall within the scope of accident insurance coverage under the Danish Guarantee Fund Act. As a result, the Danish Guarantee Fund avoids both the expense of compensating the Norwegian scheme and any uncertainty regarding the scope of the Fund’s coverage,” says Torben Weiss Garne, Director of the Danish Guarantee Fund.

The Danish Guarantee Fund was very surprised to be sued in 2019, as it did not cover industrial injury insurance at that time. Nevertheless, the Norwegian guarantee scheme argued that the Danish Guarantee Fund should cover industrial injury claims in Norway because they should be regarded as injuries caused by an accident. Today, the Danish Supreme Court rejected that argument.

In Denmark, industrial injury claims are administered by the Labour Market Insurance Authority (AES). Going forward, the Danish Guarantee Fund assumed responsibility for covering industrial injury claims in connection with insurance company bankruptcies on 1 July 2021.