DNB publishes Q&A on possible qualification of warranties included in purchase agreements as non-life insurance

On 29 January 2019, the Dutch Central Bank (De Nederlandsche Bank, DNB) published a final Q&A which provides clarification as to whether warranties typically included in purchase agreements can be considered a non-life insurance (schadeverzekering) policy. According to DNB, a warranty in a purchase agreement in principle does not qualify as non-life insurance if the following three conditions are met. the warranty forms an subordinate part of the purchase agreement (i.e. it has no independent meaning and is as a result ‘absorbed’ by the purchase agreement); the warranty relates exclusively to the nature or shortcoming of the product that is the subject of the purchase agreement; and the warranty does not cover a period that is evidently longer than the reasonably expected lifetime of the product. DNB further explains that a typical warranty in a purchase agreement often refers to existing properties and shortcomings of a product and, more generally, the quality…

Read more detail on Recent Banking and Finance Law posts –

This entry was posted in Banking and Finance law and tagged , , , , , , , , , . Bookmark the permalink.

Leave a Reply