Supreme Court: The insurance company's termination of the insurance relationship with Hells Angels was invalid

On June 26, 2024, the Supreme Court delivered a judgment in case HR-2024-1184-A. The central question was whether an insurance company could refuse to renew a property insurance contract because the premises were used by a motorcycle club affiliated with Hells Angels. The Supreme Court concluded that the insurance company's termination was invalid. The judgment clarifies the factors an insurance company can consider if they do not wish to renew an insurance contract.

Case Background

Policyholder A rented out a property used as a clubhouse by the motorcycle club Hells Angels Bergen. Policyholder A has been a member and board member of Hells Angels Bergen, and it was agreed that A could be identified with the motorcycle club for the issues raised in the case. The insurance company had insured the property since 2010, but in October 2019, the company notified that they would not renew the insurance at the end of the insurance period in January 2020. The reason was that the company, as part of its policy, did not want to offer insurance to customers who could be involved in organised crime, including members of so-called 1% MC clubs like Hells Angels.

A appealed the termination to the Financial Complaints Board and won. The insurance company did not accept the board's decision and filed a lawsuit. Both the District Court and the Court of Appeal found the termination invalid. The insurance company appealed to the Supreme Court, which accepted the case to assess the application of the Insurance Contracts Act § 3-5 second paragraph, first sentence, regarding what constitutes "special reasons" that make it reasonable to terminate the insurance relationship.

Parties' Views

The insurance company argued that they no longer had confidence that the policyholder would fulfill their obligations under the Insurance Contracts Act, which is a prerequisite for calculating premiums and insurance risk. The insurance company believed that they should be able to consider that Hells Angels is a so-called 1% MC club, and that such clubs are designated as criminal environments, among other things, in police threat assessments. Furthermore, the insurance company argued that their social responsibility and obligations under, among other things, the Anti-Money Laundering Act should be considered.

The policyholder argued that the conditions for refusing renewal were not met. The insurance relationship had proceeded without problems since 2010, and no claims had been reported during the insurance period. The insurance company had also not provided any evidence that members of Hells Angels Bergen were convicted criminals. The policyholder argued that a refusal based on general distrust would undermine the policyholder's protection and be contrary to the freedom of association.

Supreme Court's Assessment

After reviewing relevant legal sources, system considerations, and overarching concerns, the Supreme Court concluded that there is no basis for interpreting the Insurance Contracts Act § 3-5 second paragraph such that a lack of general trust based on a policyholder's connection to a criminal environment can justify refusing to renew the insurance contract. The requirement for "special reasons" must be understood as requiring circumstances of concrete significance for the specific insurance contract and the insurance risk the contract represents.

Based on this, the Supreme Court found that there was not sufficient basis to refuse renewal of the insurance contract in this case. The insurance relationship had run for 10 years without problems. The insurance company had also been aware for several years that the premises were used by Hells Angels. There was also no evidence of criminal activity by the association or its individual members that was of concrete significance for the insurance relationship. The Supreme Court therefore found that the termination must be set aside as invalid.

Significance of the Judgment

In this judgment, the Supreme Court clarifies the interpretation of the Insurance Contracts Act § 3-5. The Supreme Court emphasises that insurance companies cannot refuse renewal based on more general assumptions about the policyholder's connections to certain environments but must point to circumstances that have concrete significance for the specific insurance relationship.