UOKiK concludes proceedings on unit-linked life insurance policies with another four insurance companies committing to reduce their cancellation fees.

Poland’s Office of Competition and Consumer Protection (UOKiK) accused 17 insurance companies of shifting the distribution costs of unit-linked life insurance policies onto customers by charging them exorbitant cancellation fees on their policies. According to UOKiK, these costs should be treated as a part of the risk of running a business, and hence fall upon the enterprise. As a result of the proceedings conducted, 16 of the insurers have voluntarily agreed to significantly reduce the cancellation fees on existing agreements and eliminate them from new standard contracts.

The most recent commitments

The Compensa, Generali Life and Open Life insurance companies have all agreed to reduce their contract cancellation charges. While the extent of those charges now depends on whether policy-holders were paying regular payments or had made a one-time contribution, the fees have been reduced drastically, and now range from 5 to 25 percent of the value of the account. The fourth company, Aegon, has committed to withdraw unit-linked life insurance products from the market, and will present to consumers reduced charges not to exceed 28 percent of the value of the funds accumulated in a policy.

Proceedings are ongoing against Skandia. The company 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.

UOKiK monitors the implementation of the commitments through reports submitted by the companies. It has also set up a website with up-to-date information on the proceedings and a form enabling consumers to report information, which should further facilitate oversight of the implementation and other developments on the unit-linked life insurance market, particularly the possibility of dishonest sales practices being perpetrated.

All of the insurers are obliged to inform customers that complying with the conditions UOKiK has established for concluding an agreement does not preclude eventual civil claims from being filed. Moreover, the companies should enable consumers to withdraw from agreements concluded as a result of dishonest sales practices without incurring any charges, including termination fees. Finally, UOKiK urges policy-holders to avoid rushing decisions on cancelling their unit-linked life insurance policies, and instead wait for a written offer from the insurers.

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]

Twitter: @UOKiKgovPL