• The Generali Życie TU and TU Allianz Życie companies applied prohibited contractual terms.
• President of UOKiK has challenged the mechanism for charging allocation fees in life insurance agreements with the insurance capital fund by Generali Życie and has imposed almost PLN 11.2 million fine on that entrepreneur.
• In the case of Allianz (previously: Aviva), reservations have been raised because of non-transparent modification clauses enabling for imposition of various fees - the company will cease to apply them and will pay the compensation to the consumers affected by the modifications of the fees.

President of UOKiK Tomasz Chróstny has issued 2 decisions pertaining to the application of prohibited clauses by Generali Życie Towarzystwo Ubezpieczeń and Towarzystwo Ubezpieczeń Allianz Życie (previously: Aviva Towarzystwo Ubezpieczeń na Życie). In both cases, the decisions concerned the fees in life insurance with the insurance capital fund.

- Entrepreneurs may not take advantage of their stronger positions and insert in agreements the provisions restricting consumers’ rights and which are financially unfavourable for them - says Tomasz Chróstny, President of the Office for Competition and Consumer Protection.

Generali Życie TU - almost PLN 11.2 million of fine

In the years 2016-2018, Generali Życie Towarzystwo Ubezpieczeń offered multiannual agreements on life insurance with the insurance capital plan named Pro Familia. The President of UOKiK issued a decision whereunder he declared the contractual provisions referring to the so-called allocation fees in this product to be prohibited. On the basis of the challenged clauses, the company, in the first two years of the agreement effectuation, charged from 50% to 80% of the regular premium depending on the age of the insured person. Notwithstanding that, the company charged several other fees, such as: administration fee, operations fee, risk fee, etc.

- The provisions depicting the mechanism for charging allocation fees were to discourage consumers from rescinding of the agreement. The risk of losing a material portion of the savings might have encouraged insured persons to continue the agreements despite their intention to rescind of them. In this way, the company restricted to consumers their right to terminate the agreement. What is more, it is inadmissible to transfer the costs which should be included in the risk of running business operations - says Tomasz Chróstny, President of UOKiK.

The Authority is of the opinion that high allocation fees charged in the first two years of the agreements effectuation served a similar function to the so-called liquidation fees challenged a few years ago which were charged by the insurers when consumers wished to terminate the insurance policies with the capital insurance fund earlier. In the case of both fees, ultimately, it was frequently equal to a loss of a signification portion of savings by customers. It is worth mentioning that the provisions in liquidation agreements were deemed abusive and entered into the register of abusive clauses.

The fine for Generali Życie TU amounts to PLN 11,196,788. Additionally, the company must notify the consumers of the decision along with its consequences, namely, that the challenged clauses should be treated as non-existent in the agreement. As soon as the decision becomes legally valid, consumers may quote it in court while pursuing their claims.

Previously, the President of UOKiK found the clauses specifying the method of charging allocation fees by MetLife Towarzystwo Ubezpieczeń na Życie i Reasekuracji and AXA Życie Towarzystwo Ubezpieczeń (currently: UNIQA) abusive.

TU Allianz Życie - compensations for consumers

Following the notification by the Polish Financial Supervision Authority, the President of UOKiK took an interest in the issue of modification clauses enabling for an increase of various fees in the agreements by Aviva Towarzystwo Ubezpieczeń na Życie (currently: Towarzystwo Ubezpieczeń Allianz Życie). The challenged provisions granted a right to the company to unilaterally modify the terms and conditions of life insurance agreements with the insurance capital fund based on unprecise grounds. They allowed entrepreneurs to modify the fees which were important for consumers, namely: administration fee, allocation fee, handling fee, fee for management and administration of the insurance capital fund or to increase the regular premium while upholding or even decreasing the value of the sum insured.

- At the time of concluding the agreement, a consumer must be given clear, precise and unambiguous information on the rules of introducing possible price increases by the entrepreneur. In this instance it was not the case. The agreements failed to specify the grounds for fees increase, the company only quoted some vague ratios which it would take into account. What is more, the balance of the parties was not observed - the agreements would not stipulate analogous fee reductions if those ratios went down. Such provisions violate public decency and collective consumer interests - explains Tomasz Chróstny, President of UOKiK.

In the course of the proceedings, TU Allianz Życie committed to cease to apply the prohibited provisions, to notify the consumers of them and to pay compensations to the injured parties. The President of UOKiK approved its commitment by dint of which the company avoided the fine.

The compensations are attributable to the participants of group life insurance schemes with the insurance capital fund for whom the insurer, under the challenged clauses, increased the cost of the insurance coverage or the insurance for the risk of death on the day of the insurance anniversary. They will be reimbursed with the amounts arising from increases of premiums charged from 17 April 2016 to the day of this practice abandonment. The reimbursement will be made in the form of a payment to the account of the insuring person who should transfer the monies to the insurance participant (the insured person) or, in the event of the consumer’s inactivity, in the form of units of the insurance capital funds. Check the details in the decision of the President of UOKIK which is now legally valid.

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