Companies Generali Life TU and TU Allianz Life applied prohibited contractual provisions. The president of UOKiK questioned the mechanics for Generali Life collecting allocation fees in life insurance contracts withufk and imposed on this entrepreneur nearly PLN 11.2 million penalties. In the case of Allianz (formerly Aviva), there were unclear modification clauses allowing for increases in various fees – the company will halt applying them and the consumers affected by changes in fees will pay compensation.
President of UOKiK Tomasz Chróstny issued 2 decisions concerning the usage of clauses not permitted by the General Life Insurance Association and the Allianz Life Insurance Society (formerly Aviva Insurance Association for Life). In both cases they afraid life insurance premiums with an insurance capital fund (ufk).
– Entrepreneurs cannot usage their stronger position and include in the agreements provisions that restrict consumers' rights and are financially disadvantageous to them – says Tomasz Chróstny, president of the Competition and Consumer Protection Office.
General Life of TU – nearly PLN 11.2 million
In 2016-2018, Generali Life The Insurance Society offered long-term life insurance contracts withufk named Pro Familia. The president of UOKiK issued a decision in which he considered the contractual provisions determining the alleged allocation fees in this product not permitted. Under the contested clauses, in the first 2 years of the contract, the company charged – depending on the age of the insured individual – 50 to 80 percent of the regular contribution. In any event, the company charged respective another charges, e.g. administrative, operational, for risk.
– The provisions setting out the allocation fee mechanics were intended to discourage consumers from withdrawing from the contract. The hazard of failure of a crucial proportion of the accumulated savings may have led the insured to proceed their contracts, even though they would like to retreat from them. Thus, the company limited consumers' right to terminate the contract. It is besides unacceptable to pass on to consumers costs that should be included in the business risk – says Tomasz Chróstny, president of UOKiK.
In the Authority's view, the advanced allocation fees in the first 2 years of the contracts have a akin function as the alleged liquidation charges imposed by insurers a fewer years ago erstwhile consumers wanted to resolve their ufk policies before the deadline. For both types of charges, this yet frequently meant the failure of a vast majority of savings by customers. It is worth noting that the provisions on winding-up contracts were regarded as abusive and entered into Register of prohibited clauses.
Punishment for General Life TU is PLN 11 196,788. The company must besides inform consumers of the decision and its consequences, namely that the contested clauses should be treated as if they were not in the contract. erstwhile the decision is final, consumers will be able to trust on it in court for redress.
Previously, the president of UOKiK considered that the clauses determining the way the allocation fees were collected by MetLife Life and Reinsurance Insurance Association and AXA Life Insurance Society (now UNIQA).
TU Allianz Life – compensation for consumers
The president of UOKiK took an interest in the issue of modification clauses allowing increases in various fees in the contracts of Aviva Insurance Association for Life (now the Allianz Life Insurance Association) after notification to the Financial Supervision Commission. The contested provisions granted the company the right to unilaterally change the terms of life insurance contracts withufk based on imprecise conditions. They enabled entrepreneurs to change specified crucial charges for consumers, e.g. administrative, allocation, handling, management and administration of ufk or increase the regular contribution while maintaining or even reducing the insurance sum.
– At the time of conclusion of the contract, the consumer must be given clear, accurate and unambiguous information on the rules for introducing any increases by the entrepreneur. In this case, it wasn't. The contracts did not specify the reasons for the increase in fees, the company only pointed to the underspecified indicators which it would consider. In addition, the balance of the parties was not maintained – the contracts did not supply for akin reductions in fees in the event of a decrease in these indicators. specified provisions violate good habits and collective interests of consumers – explains Tomasz Chróstny, president of UOKiK.
During the procedure, TU Allianz Life undertook to halt applying the prohibited provisions, inform consumers about them and pay compensation to the victims. The president of the UOKiK accepted the undertaking, so that it avoided financial punishment.
Compensation shall be granted to participants in group life insurance from ufkwhich, under the contested clauses, the insurer raised on the anniversary of the insurance, insurance costs or hazard of death. They will receive a refund of the money resulting from increases in contributions collected from 17 April 2016 until the date of cessation of practice. The refund will be made as a payment to the policyholder's account, which should transfer the money to the insurance associate (insured) or, in the absence of consumer activity, to the insurance fund units. Check details in Decision of the president of UOKiKwhich is already valid.
UOKiK
