The act on complaints sets out the rules for dealing with complaints by financial market entities, submitted by their clients and the Financial Ombudsman’ activities and competencies.
What must be pointed out are the main statutory definitions included in the act on complaints, which define the subjective and personal scope of its application and are of significance from the point of view of a foreign insurance company performing insurance activity in Poland under the FOS basis.
The client of a financial market entity shall mean:
- a natural person being a policyholder, insured, beneficiary or entitled under an insurance agreement,
- a natural person raising claims towards the Insurance Guarantee Fund or the Polish Motor Insurers’ Bureau, under the provisions of the Act of 22 May 2003 on compulsory insurance, the Insurance Guarantee Fund and the Polish Motor Insurers’ Bureau.
The complaint shall mean a request addressed to a financial market entity by its client, in which the client expresses dissatisfaction about the services provided by the financial market entity.
The financial market entity shall mean a.o. a domestic (Polish) insurance company, a foreign insurance company, the main branch of a foreign insurance company and a branch of a foreign EU insurance company.
The obligation to apply Polish law results also from a general provision of art. 205 of the new act on insurance activity, mentioned above, which provides that a foreign insurance company of different than Poland EU member state, carrying out insurance activity on Polish territory is obliged to apply the provisions of Polish law to the extent necessary to protect overriding public interest (referred to in Art. 2 paragraph. 1 point 7 of the Act of 4 March 2010 on provision of services on Polish territory, unless otherwise stipulated in an international agreement to which Poland is party).
Handling complaints by financial market entities
The place of submitting a complaint
A complaint may be submitted by a client in each unit of the financial market entity handling clients.
What could be understood from the literal wording of that provision is that a complaint may be submitted solely in a unit of a domestic or a foreign insurance company, which handles clients. However, when interpreting the analysed provision in the light of the entire Polish legal system, what absolutely must be taken into account is art. 16a of the current act on insurance activity, which as of January 1st 2016 will be replaced and modified by art. 30 of the new act on insurance activity.
According to art. 16, notices and statements made in connection with an insurance agreement to an insurance agent shall be deemed to have been submitted to the insurance company on behalf of or for the benefit of which the agent acts. Art. 30 of the new act on insurance activity modified this provision and added that such notices and statements shall be deemed to have been submitted to the insurance company, provided they have been made to the insurance agent in writing or on any other durable medium.
According to the statutory definition included in the act on complaints, a durable medium is a carrier that allows the user to store information addressed to him/her in a way enabling access to this information for a period appropriate for the purposes of preparation of this information and allowing for reproduction of the information stored in an unchanged form.
The insurance company cannot exclude or limit the above authorization of an insurance agent.
There is no doubt that the claim under the act on complaints, is a notification or a statement made in connection with the insurance agreement and as such may be submitted at an entity acting on behalf of an insurance company, including its agent.
In my opinion, the current act on insurance activity, which will be replaced by the new act on insurance activity, is a specific act in relation to the act on complaints. The act on complaints constitutes a law system and generally governs the conduct of all financial market entities. Whereas the act on insurance activity includes provisions specific to the insurance sector. As a result, the provisions of the act on insurance activity (and the new act on insurance activity) will apply unconditionally and ahead of any other legal provisions. In consequence, submitting by a client a complaint directly to the insurance agent shall be considered equivalent to submitting it at the insurance company.
The forms of submitting a complaint
The act on complaints provides that a complaint may be submitted in different forms, which are as follows:
in a written form – submitted in person in the unit of the financial market entity which handles clients or by post within the meaning of Postal Law, which provides that a letter shall be accepted and delivered by the postal operator (a trader authorized to provide postal services, based on an entry in the register of postal operators);
verbally – by phone or in person to the protocol when visiting a client in a unit of the financial market entity which handles clients;
in an electronic form with the use of means of electronic communication, provided that such measures have been indicated for this purpose by the financial market entity.
What should be stressed here is some inconsistency with the provisions of art. 30 of the new act on insurance activity, which provides that notices and statements made in connection with on insurance agreement to an insurance agent shall be deemed as submitted to the insurance company, provided they have been made to an insurance agent in writing or on any other durable medium. As already mentioned, the act on complaints also provides for other forms of submitting complaints. In practice this can cause problems with the interpretation of applicable provisions of both acts and their mutual relationship.
Disclosure obligation
The entity of the financial market shall include in an agreement concluded with the client (in practice in general terms and conditions of insurance) the following information regarding the procedures for submitting and handling complaints:
1) the place and form of submitting a complaint;
2) the deadline for handling the complaint;
3) the manner of notification of the complaint’s handling.
For customers who have not signed a contract with the financial market, such information should be delivered within 7 days from the date on which the notification of customer claims against the entity of the financial market was received.
Response to the client
After receiving the complaint the financial market entity shall investigate the complaint and provide the customer with a response on paper or via a durable medium. The response may be delivered via e-mail only at the request of the client.
The response should be provided without undue delay, but no later than within 30 days of receiving the complaint. To meet the deadline it shall be sufficient to send the response before its expiry.
In particularly complex cases, preventing considering the complaint and replying within the period of 30 days, the financial market entity can provide the client with information in which it:
1) explains the reason for the delay;
2) specifies the circumstances that must be established for consideration of the case;
3) defines the anticipated date of handling the complaint and reply, which may not exceed 60 days from the date of receipt of the complaint.
Meeting the above statutory requirements is crucial as the act on complaints, in art. 8, provides that in case of failure to meet the deadlines specified above, the complaint is considered to be dealt with in accordance with the will of the client.
The response to the client should contain in particular:
1) the factual and legal grounds, unless the complaint was dealt with according to the will of the client,
2) comprehensive information on the position of the financial market entity regarding requests made in claims, including an indication of the relevant provisions of the insurance agreement or general terms and conditions of insurance;
3) name and surname of the person providing the response, indicating their official position;
4) the date on which the claim raised by the client in the complaint will be executed in accordance with the will of the client, no longer than within 30 days from the date of drafting the response.
In case of rejection of claims arising from the client’s complaint, the response should also include instruction on the possibility of:
1) filing an appeal against the position contained in the response, provided the financial market entity provides for an appeal procedure, as well as on the manner to lodge the appeal,
2) using institutions of mediation or arbitration courts or some other mechanism providing amicable settlement of disputes, provided the financial market entity provides for such a possibility,
3) submitting a request to consider the case to the Financial Ombudsman,
4) bringing an action before an ordinary court with an indication on who should be sued and the court locally competent to hear the case.
The activities and authorities of the Financial Ombudsman
The Financial Ombudsman is a governmental institution established to protect the clients of financial market entities, a.o. insurance companies. The Financial Ombudsman shall be entitled, in particular, to:
- consider requests in individual cases, brought as a result of failure to acknowledge the client’s claims within the complaints handling procedure,
- consider requests concerning failure to perform activities resulting from the favourable consideration of submitted complaints,
- informing the supervision and control authorities on irregularities in the functioning of financial market entities,
- carry out non-judicial proceedings for resolving disputes between financial market entities and their clients.
The Financial Ombudsman can take action ex officio, upon request of a competent authority or upon request of a client whose claims have not been satisfied within the complaints handling procedure. After having examined the request, the Financial Ombudsman may either take action, indicate to the client their rights and means of action, refer the matter to a non-judicial procedure for settlement of disputes between the client and the financial market entity, or refuse to take action whilst simultaneously informing the interested parties.
The Financial Ombudsman, if taking action, is obliged to examine whether an act or omission by the financial market entity resulted in any violation of the rights or interests of the client.
The Financial Ombudsman or its authorized employee is entitled to:
request the financial market entity and other entities whose activities relate to the matter (e.g. insurance agents), to provide information or explanations, and access to documents and records, both in individual cases, and in cases of standard contracts, as well as in matters relating to internal regulations of relevant entities, which according to the Financial Ombudsman are detrimental to clients and on an incorrect service to clients, provided by financial market entities.
Request for information or clarifications in individual cases can be made only upon the consent of the client concerned.
The financial market entity, which received a request from the Financial Ombudsman, shall immediately, not later than within 30 days upon receipt of the request, inform the Financial Ombudsman on the actions taken or its position and provide the requested documents.
After examining the case, the Financial Ombudsman is entitled to:
- inform the client on finding no violation of his/her rights or interests,
- turn to the relevant financial market entity to reconsider the case,
- turn to the competent authority, in particular, to the Financial Supervision Authority, the President of the Office for Competition and Consumer Protection, or prosecutors.
The financial market entity is obliged, at the request of the Financial Ombudsman, to submit the standard contract, which is used in its activity, as well as other documents and forms to be used in concluding and implementing agreements, within 14 days upon receipt of the request.
The Financial Ombudsman is also entitled to bring an action on behalf of clients of financial market entities, in matters of unfair market practices concerning the activities of these entities, as well as, upon the consent of the plaintiff, to participate in the ongoing proceedings.
The Financial Ombudsman is entitled to impose a fine of up to PLN 100,000 on any financial market entity which breaches the indicated obligations imposed by the act on complaints (disclosure obligation towards clients, obligations related to providing response to clients, obligations towards the Financial Ombudsman).
The financial market entity is obliged annually, within 45 days upon the end of the given calendar year, to provide the Financial Ombudsman with a report on handling of complaints and the number of cases brought to court by its clients, as a result of rejection of clients’ claims, including:
1) the number of complaints;
2) acknowledged and rejected claims resulting from complaints filed,
3) information on the value of claims raised in the lawsuits and the amounts awarded with valid judgments of the courts to clients in the reporting period.
Contributions to cover the costs of the Financial Ombudsman’s activity
The costs of the Financial Ombudsman and its office shall be borne by financial market entities. Foreign insurance companies are obliged to pay a contribution in the amount of up to 0.025% of gross premiums collected. This amount is calculated based on gross premiums collected under insurance agreements entered into in connection with the performance of insurance activity in Poland.
The receivables are subject to execution under the provisions on administrative enforcement proceedings. In case of failure to meet the deadline of payment of receivables, set out in the implementing executive regulations (which are to be adopted and entered into force no later than on 11 April 2016), default interest shall be collected in the amount of statutory interest, defined in the Civil Code, which currently amounts to 8% per year. The default interest shall not be charged if its amount does not exceed PLN 8.70.
The deadlines for payment, the amount and the manner of calculation of receivables shall be set out in the implementing regulation, the draft of which is currently in the course of legislative procedures.
The first published draft of the Minister of Finance’s regulation of November 2015 in this respect provides that the amount of receivables from a foreign insurance company for a given year shall be calculated as a product of: (1) percentage share of a given foreign insurance company in the calculated gross premium of all foreign insurance companies on the insurance agreements concluded in connection with performing insurance activity in the territory of Poland in a given year, (2) percentage share of advance payments due from foreign insurance companies in the overall amount of advance payments due from domestic insurance companies, foreign insurance companies and general pension societies and (3) overall costs incurred by the Financial Ombudsman in a given year, no greater than the sum of advance payments due from a given foreign insurance company. The amount of the calculated gross premium of all foreign insurance companies on insurance agreements concluded in connection with performing insurance activity in the territory of Poland shall be determined on the basis of information provided by each of insurance companies to the Financial Ombudsman no later than by 15 July of the following year.
A foreign insurance company is obliged to determine each month an advance payment towards the Financial Ombudsman’ s costs in the amount of 0.015% of the sum of calculated gross premiums on insurance agreements concluded in connection with performing insurance activity in the territory of Poland in the month preceding the month for which the advance is paid. A foreign insurance company shall pay the advance for a given month by the end of the month at the latest, and at the same time informs the Financial Ombudsman of the basis for calculation, the period covered and the amount of the advance paid. Should the amount of advances be higher than the amount of receivables due, an overpayment shall arise which will be credited against the next year’s receivables or returned at the written request of a given insurance company within 30 days. Should the amount of advances be lower than the amount of receivables due, an underpayment shall arise. The insurance company shall pay the underpayment within 30 days of receipt of the relevant information from the Financial Ombudsman. The Financial Ombudsman shall provide both the information on the overpayment, and the underpayment to insurance companies by 31 August of the following year.
Non-judicial proceedings for resolving disputes between financial market entities and their clients
The provisions of the act on complaints providing non-judicial proceedings for resolving disputes between financial market entities and their clients shall enter into force on 1 January 2016.
A dispute between a client and a financial market entity may be settled by way of special non-judicial proceedings. The Financial Ombudsman, at the request of the client, shall carry out the proceeding.
The Financial Ombudsman may refuse to initiate proceedings if:
1) the client has not exhausted the complaint procedure,
2) the request is aimed at causing inconvenience to the other side,
3) the dispute is being or has already been examined by a court or other competent body,
4) examination of the dispute would cause serious disruption of the effective conduct of the proceedings by the Ombudsman;
5) the customer has not paid the fee.
The participation of the relevant financial market entity in the proceedings is mandatory.
During the proceedings, the Financial Ombudsman acquaints the financial market entity with the client’s claim and submits a proposal to resolve the dispute. If no amicable settlement is reached, the Financial Ombudsman shall prepare an opinion including a legal assessment of the facts in the proceeding.
