Distant selling of financial services (insurance contracts being a financial service) is regulated by the Act on consumer rights.
Under the Act on consumer rights, using a telephone or other means of distant communication (this however does not refer to online sales) in order to make an offer to conclude a contract is allowed only with the prior consent of the client (in the Act on consumer rights referred to as a “Consumer”). Thus, before the insurance agent provides the Consumer with a proposal to conclude an insurance contract, they will have to first obtain the Consumer’s consent for making such a proposal (the consent could be obtained during the first contact with the customer). Furthermore, the use of telephone or other means of distant communication may not be at the Consumer’s expense. In addition, the proposal to conclude a contract, expressed in the form of an offer, invitation to offer, or order, should univocally and clearly indicate the intention to conclude a contract.
The Act on consumer rights obliges entities wishing to conclude a contract to perform certain information duties towards the Consumer. First of all, in the case of using a telephone in order to make an offer, the insurance company (or agent acting in their favour) should inform the Consumer, at the moment of making the offer at the latest, of its name, address, registration number, regulatory office of supervision, name and address of the phone operator, description and price of the offered service, right of withdrawal, etc., as specified in art. 39 par. 1 of the Act on consumer rights. The scope of this information may be limited with the consumer’s consent, as provided for in art. 39 par. 3 of this Act. The entity must also inform the Consumer of their right to demand additional information concerning the entity and the contract, and must state how such information can be obtained. Furthermore, before concluding a contract (or, when the contract is concluded through use of means of distant communication, right after concluding the contract), the entity is obliged to confirm all this information to the Consumer in writing or by use of CD-ROM, floppy disk, etc. During the term of the contract, the Consumer also has the right to demand the terms and conditions of the concluded contract in writing.
If the entity does not comply with the obligations referred to above (e.g. did not deliver all of the required information), the Consumer is entitled to withdraw from the contract at any time, without need to bear any costs due to the entity.
If the insurance contract was concluded in accordance with the provisions of the Act on consumer rights, the Consumer is entitled to withdraw from the contract, without giving reasons, by issuing a written statement, within 30 days from being informed of the conclusion of the contract or receiving written confirmation of the information (as specified above) – whichever happens later. The Consumer’s right of withdrawal may not be subject to any remuneration (compensation) paid by the Consumer. In the event of withdrawal, the contract shall be null and void and the Consumer shall be free from any obligations. What the parties rendered to each other shall be returned unchanged. If the entity has already, upon the Consumer’s consent, provided some services before the lapse of the 30 days’ withdrawal period, then it may claim remuneration for services actually performed. If the services were provided (before the lapse of 30 days) without the Consumer’s consent, or if the Consumer was not informed (according to the procedure mentioned above) of any remuneration to be paid for services provided in the interim period, then the entity is not entitled to claim any remuneration.
These rules, as provided by the Act on consumer rights, may not be set aside by the parties, even if the contract is to be governed by foreign law.
Telecommunication Law
It is also indispensable to mention that according to the Act on telecommunication law, it is forbidden to use telecommunication end devices (i.e. communication devices designed to be connected directly or indirectly to the network termination) and automated calling systems for direct marketing, unless a subscriber or an end user (including a consumer) has given prior consent to do so. Such a consent may not be presumed or implied by a declaration of will of another content. It may be expressed by electronic means provided that it is recorded and confirmed by the consumer and may be withdrawn at any time, in a simple manner and free of charge. Using such means of direct marketing cannot be done at the expense of the consumer. This is new legislation (the law has been in force since December 2014) therefore there is no jurisprudence or comments on it; however, so far, most experts on distance selling law agree that consent granted by a client at the very beginning of a telephone conversation and properly recorded should be treated as consent expressed by electronic means. This means that the telephone conversation script for call center agents should be very carefully prepared.
Please also note that in a case of a traditional sale, if an insurance contract is executed for a term longer than six months, the policyholder has the right to withdraw from the contract within 30 days and, if the policyholder is an entrepreneur, within 7 days of contract execution. Withdrawal from the insurance contract does not release the policyholder from the obligation to pay the premium for the period in which the insurer provided insurance coverage.
Providing Services by Electronic Means
The obligations of a service provider related to providing services by electronic means and rules of releasing service providers from legal liability concerning the providing of services by electronic means is regulated by the Act on providing services by electronic means.
Under the Act on providing services by electronic means, a service provider must inform the Customer clearly, explicitly and directly through the teleinformation system used by the service recipient, of their basic information, e.g. electronic addresses, name, place of residence and address. This is to ensure the customer has the opportunity to easily make contact with the service provider.
In addition, a service provider is obliged to provide the recipient access to current information about the particular risks related to using a service provided by electronic means and the function and aim of the software or data which are not an element of service contents, and which are introduced by the service provider into a teleinformation system used by the service recipient. This aims in particular to ensure the safety programs or advertising.
A service provider should be able to use the services by electronic means in a manner which prevents unauthorized persons from accessing the contents of communications being an element of the service, in particular through applying cryptographic techniques appropriate for the characteristics of the service being provided. Actions taken by the service provider should be appropriate to the characteristics of the service.
A service provider establishes regulations for providing services by electronic means and makes available the regulations to a service recipient free of charge before concluding the contract on providing such services, and also – on their request – in such a manner, which enables downloading, retrieval and saving the contents of the regulations through the teleinformation system used by the recipient. The regulations specifie in particular the types and scope of services provided by electronic means, the conditions for providing services by electronic means (technical requirements necessary for co-operation with a teleinformation system and a ban on delivering messages of illegal nature by the service recipient), conditions for concluding and terminating contracts for providing services by electronic means and procedures for making complaints. A service provider if obliged renders services by electronic means according to the regulations.
The personal data of a service recipient may be processed by a service provider for the purpose and within the scope specified in the Act on providing services by electronic means. The service provider may process the following personal data of the service recipient necessary for entering in legal relationship between them, e.g. service recipient names, PESEL number, permanent residence address, address for correspondence, data used for verifying the service recipient’s electronic signature and the service recipient’s electronic addresses. The service provider is not allowed to process the personal data of the service recipient upon termination of using the service provided by electronic means, except where necessary for billing the service or proceeding with claims for payments due to use of services, necessary for the purposes of marketing, market research and research on behavior and preferences of service recipients with the results to be used for the needs of improving quality of services provided by the service provider, upon the consent of the service recipient, necessary for investigation into circumstances of illicit usage of services and admitted for processing by relevant acts or agreements.
It also should be noted that sending unsolicited commercial information addressed to a specified recipient by electronic communications means, in particular electronic mail is prohibited. Commercial information shall be considered solicited, if the recipient has expressed their consent to receive such information, in particular, they have made available for the purpose of such receipt an electronic address that identifies them.
The Act on providing services by electronic means provides for legal sanctions for breaching the provision thereof.
also provides for breach of duty by providing electronic services, criminal sanctions in the form of fines. This applies, in particular, to the obligations imposed on the provider of information and breach of the from transmitting transmit unsolicited commercial information without the consent of the recipient.
