The practices of PZU Życie concerning employee group insurance violate the law, ruled Marek Niechciał, President of the Office of Competition and Consumer Protection, and imposed a fine of over PLN 50 million on the company 

 PZU Życie is one of the biggest insurance companies that operate in Poland. Its share of the market of employee group insurance remains on a level exceeding 90%. The antimonopoly proceedings, which the President of UOKiK launched in June 2005 were meant to check if the company had not abused its dominant position.

A motion for the President of UOKiK to launch the proceedings had been submitted by ten employers. In their opinion, the fact that the insurance company included in its contracts with them numerous unfavourable clauses (such as, for example, the requirement that terminating the contract is possible only with prior consent of the insured employees, despite the fact that they are not party to the contract) violated the antimonopoly law.

Having examined the case, the President of UOKiK supported the position of the motioning party, stating that the insurance giant’s conduct may effectively impede the possibility of using the offers of its competitors and has a major impact on the conditions of operating on this market.

In particular, the President of UOKiK considered it reprehensible that employers wanting to withdraw from the contract with PZU Życie for employee group life insurance were obliged to pay the premiums for a three-month notice period. Under the existing law, an employee accepting to take out an insurance policy agrees that the insurance premium be deducted from his/her salary. At the time of withdrawal from the insurance agreement, such authorisation may be withdrawn as well, and the costs for the notice period are born by the employer.

On 1 January 2004 PZU Życie changed some of the clauses that UOKiK had found questionable, for instance the requirement of the prior consent of at least 75% of the employees for an insurance agreement to be effectively terminated. However, not all of the contracts made before that day have been annexed by now. This means that all of the questionable practices are still applied.

Taking the above into consideration and considering the fact that the employers who entered into an insurance agreement with PZU Życie in the period 1993-2003 had to obtain a consent of at least 75% of the insured employees in order to terminate the agreement, the President ordered PZU Życie to change its conduct immediately.

A fine exceeding PLN 50 million was imposed on the company. This severe sanction results from an exceptionally great scale and long time frame of PZU Życie's infringements.

Due to the fact that the practices of PZU Życie may have an impact on the trade between the EU Member States, the decision was issued on the basis of the EU legislation. According to the relevant procedure, it was consulted with the European Commission.

The decision of the President of UOKiK is not final. The company has the right to appeal to the Court of Competition and Consumer Protection.

More information:
Małgorzata Cieloch, Spokesperson for UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Tel. (+48 22) 827 28 92, 55 60 106, 55 60 314
faks (+48 22) 826 11 86
E-mail [SCODE]bWNpZWxvY2hAdW9raWsuZ292LnBs[ECODE]