• The President of the UOKiK has presented a reasoned opinion in the “TU na Życie Europa” (Europa Life Insurance Association) case.
• For the first time ever, a reasoned opinion has been issued which pertains to the validity of the consumer’s declaration on the accession to a group Unit-Linked Insurance Plan (ULIP).
• In the view of the President of the UOKiK, the insurance contract with the specific insured in question should be deemed invalid. The reason for this is the invalidity of the declaration on the accession to the group insurance plan.

The President of the Office of Competition and Consumer Protection presented yet another reasoned opinion concerning unit-linked life insurance plans (ULIPs), also known as savings insurance policies. Up to this moment, the President of the Competition Authority issued about 30 reasoned opinions in which he questioned the validity of contractual provisions which provided for exorbitant cancellation fees. In the present case, however, the circumstances of the case were such that the President of the Office was able to express an opinion on the invalidity of the insurance contract with respect to a specific insured.

The case pending before the Regional Court in Warsaw (case no. XXV C 470/17) pertains to unit-linked group life and endowment insurance contracts linked to the Pareto II, Libra and Libra II capital funds. The client terminated the contracts prematurely; as a result, the insurer made a deduction of between 20 and 40 per cent of the account value by way of cancellation fees. The consumer went to court, claiming that the insurance contract should be deemed invalid and that all contributions already made should be reimbursed (taking into account the amounts already paid by the insurer in connection with the termination of the insurance contract) or, in the event that this claim was rejected – that the amounts of all cancellation and administrative fees should be reimbursed.

The President of the Office of Competition and Consumer Protection has presented
a reasoned opinion in which he considered these demands to be justified. The President explains that, in accordance with article 829 of the Polish Civil Code, one of the mandatory constituent parts of a declaration of the insured concerning his or her willingness to take advantage of the insurance coverage provided for under a life insurance contract concluded for the account of another is the indication of the insurance amount, i.e. the amount which shall be disbursed, for example, upon death of the insured. In this case, however, instead of a specific amount, the company provided a set of formulas for the calculation of the amount in question, linked to the value of the investment fund share units or the value of the account on the day of redemption. The value of these amounts was impossible to determine on the day of conclusion of the contract.

– The requirement for the insurance amount to be specified is intended to protect the consumer against acceding to a disadvantageous contract. From the very beginning, the insured must be aware of what insurance amount he or she may expect to be paid in the future – explains Marek Niechciał, President of the UOKiK.

Otherwise, the declaration on the willingness to take advantage of insurance coverage shall be deemed invalid, which also entails the invalidity of the contract vis-à-vis the specific insured. As a consequence, in the view of the President of the UOKiK, the claimant should be reimbursed for all the contributions made so far, minus the amounts already disbursed by the insurer (in connection with the termination of the relevant contracts).

Furthermore, the President of the UOKiK submits that the contract contained prohibited clauses concerning cancellation fees. These fees, determined unilaterally by the insurer, are completely unrelated to the costs incurred by the insurer and are only intended to secure its own interests.

– The financial burden associated with the contract was shifted upon the consumer, allowing the insurance company to gain a privileged position – Marek Niechciał says.

The reasoned opinion of the President of the UOKiK is not binding upon the court of law. The legal assessment presented by the Competition Authority may not be applied to any other cases, even where such cases are ostensibly similar. In each given case, the President of the UOKiK performs an assessment of the factual and legal circumstances of the case, the applicable case law as well as the application filed by the claimants.

Reasoned opinions in consumer cases – the rules

• A reasoned opinion in a given case is a written opinion of the President of the UOKiK in which he/she presents the arguments and views which are relevant to the given dispute, based on the specific factual and legal circumstances of the case. For the above reason, the assessment contained in a reasoned opinion may not be applied to any other cases.
• A reasoned opinion is only issued with respect to a case pending before a court of law.
• It may only be issued where doing so is considered to be in the public interest.
• A reasoned opinion always pertains to a dispute between a consumer and an undertaking.
• The President of the UOKiK may present a reasoned opinion at his or her own initiative, at the request of the consumer or undertaking, or at the request of the court.

Additional information for the media:

UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Phone: 695 902 088
Email: biuroprasowe@uokik.gov.pl

Twitter: @UOKiKgovPL