Poland’s Office of Competition and Consumer Protection (UOKiK) has now concluded nine proceedings on unit-linked life insurance policies and exorbitant cancellation fees. Another two insurance companies, Axa and Europa, have committed to reduce their fees, while a third, Pramerica, has committed to completely eliminate them.

In December 2014 UOKiK charged 17 insurance companies with imposing cancellation charges on consumers to cover distribution costs of unit-linked life insurance policies. Clients of Axa and Europa with existing contracts will now incur much lower costs to terminate those policies, and Pramerica clients will not pay any. All three of the companies have agreed to do away with the cancellation fees from standard contract terms, bringing to nine the number of companies to have agreed to such changes and offer customers substantial redress. The other six include Allianz, Aviva, Nationale Nederlanden, MetLife, PKO Life and PZU Life.

The insurers’ commitments

• Axa Life Insurance Company committed to reducing cancellation fees they charge consumers on 39 products, including both individual and group insurance products, which it offered directly and through representatives at banks including mBank, Idea Bank, and BNP Paribas. In the case of regular premium policies, the cost will now not exceed 25 percent of the accumulated funds. However, customers who opt for early termination of contracts with a single premium will face costs not to exceed 7.5 percent.
• Europa Life Insurance Company committed to change the unit-linked insurance contracts it had concluded on 46 standard contracts UOKiK challenged during the proceedings. The changes are to apply to both individual and group policies. The cancellation charges for the regular premium policies will, like Axa’s, come to 25 percent of the value of the contract. Consumers cancelling single premium contracts will pay not more than 4 percent of the account value or of the premium invested. The company’s commitments apply to fees established in general conditions of insurance (GCI) including settlement, operational and administration fees.
• Pramerica Life Insurance and Reinsurance Company has committed to entirely eliminate the cancellation fee regardless of the date the contract was signed. The commitment applies to clients who are parties to currently binding contracts, and is indefinite and irreversible, as well as to new ones.

UOKiK will monitor the implementation of the decision on the basis of reports submitted by the insurers.

Proceedings are ongoing against a further eight life insurance companies that have offered unit-linked life insurance policies. They include Aegon, Compensa, Generali, Open Life, Skandia, Ergo Hestia Sopot, WARTA, and UNIQA. They may end up likewise committing to measures to repair the effects of the illegal practices they have employed or, ultimately, face a UOKiK decision finding infringement of collective consumer interests. Should they opt for the latter, UOKiK would require them to eliminate the cancellation fees currently in place on existing policies, and could also subject them to financial penalties.

Additional information for the media:

Press Office, UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Phone.: +48 22 827 28 92, +48 22 55 60 314, +48 22 55 60 430
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]