On Feb. 2, 1981, the Israeli Knesset (Parliament) passed, almost five years after the relevant Bill was submitted by the Government, the Insurance Contract Law, 1981.

The new law was due to come into force on Jan. 1, 1982 (with the exception of para. 28a), which deals with the linkage of claims to the Cost of Living Index, which came into force on May 12, 1981 (para. 75a). This may be explained by the triple-digit inflation presently prevailing. The new law aspires to embrace all commercial insurance branches (as distinguished from social insurance, which is covered by the National Insurance Law) with the exception of marine and air insurance, and reinsurance.

Up to now, the prevailing law relating to insurance was the 1904 Ottoman Insurance Code which, with the advent of time, has become painfully outdated, and clamouring for reform.

The law is divided into five major chapters: General Provisions (regulations for all types of insurance), Life Insurance, Accident, Sickness and Invalidity Insurance and Miscellaneous Provisions.

Substantially, the law is based on the work of a preparatory committee headed by (the now retired) Supreme Court Justice, Dr Alfred Witkon, and is guided mainly by Continental jurisprudence, principally by the Swiss, German, French, Italian—and to some extent by the Argentine insurance codes. As will be observed, the principal influence is derived from the 1908 Swiss Insurance Law, which is to date considered to be one of the most auspicious items of insurance legislation. Nonetheless, local experience and precedents, as well as English law and custom, have also left their indelible mark. The principal trend of the new law is the avowed intention to strengthen the position of the insured, to create a situation of clarification and simplification.

However, the provisions of the law, in several instances, go far beyond the ambit of clarification or simplification: In several important domains they impose entirely new and hitherto unheard of norms: the following major innovations may be particularly noteworthy:

—The insurer is obliged to deliver to the insured a written and signed policy, and until he does so, the customary policy as deposited with the Commissioner of Insurance will prevail (para. 2).