Article 1838. Breach of the duty of disclosure

(1) When the policyholder is in breach of Article 1837, the insurer shall be entitled to propose a reasonable variation of the contract or to terminate the insurance. To this end the insurer shall give written notice of its intention, accompanied by information on the legal consequences of its decision, within one month after the breach of Article 1837 becomes known or apparent to it.
(2) If the insurer proposes a reasonable variation, the contract shall continue on the basis of the variation proposed, unless the policyholder rejects the proposal within one month of receipt of the notice referred to in para. (1). In case of rejection, the insurer shall be entitled to terminate the insurance within one month of receipt of written notice of the policyholder’s rejection.
(3) The insurer shall not be entitled to terminate the insurance if the policyholder is in innocent breach of Article 1837, unless the insurer proves that it would not have concluded the contract, had it known the information concerned.
(4) Termination of the insurance shall take effect one month after the written notice referred to in para. (1) has been received by the policyholder. Variation shall take effect in accordance with the agreement of the parties.
(5) If an insured event is caused by an element of the risk falling under the obligation provided by Article 1837, but was not disclosed, and the insured event occurs before termination or variation takes effect, no insurance money shall be payable if the insurer would not have concluded the contract had it known the information concerned. If, however, the insurer would have concluded the contract at a higher premium or on different terms, the insurance money shall be payable proportionately or in accordance with such terms.