On 8th August 2016 Puls Biznesu reported that the Insurance sector is working on resolving the problem of UFK policies – the so called policy deposit (polisolokata). In April the Chairman of PiS Jarosław Kaczyński promised to set free holders of such policies calling them slavery. These words really scared insurers. These products were bought by 5 mln Poles. A great many of them lost their money and cannot get it back. Insurers were seriously scared when politicians announced that they will not sit by and do nothing.
According to Puls Biznesu sources insurers are working on a solution that will once and for all deal with the problem of UFK policies. The tool that will allow them to do that is a settlement made in the previous year by 18 life insurers with the UOKiK, which provides that clients will be able to withdraw their funds from these policies cheaply. However settlements covered only 20% of the 5 million policyholders because UOKiK did not have the legal authority to inspect products that are no longer distributed. This is why the office could not enforce a solution that would include all policyholders.
Puls Biznesu established that by the end of July the Polish Chamber of Insurance had presented UOKiK with a ready solution, which envisages the extension of the application of the settlement on all UFK policyholders. Work on this solution gained momentum. It is possible that even this month UOKiK will accept the extension of the settlement. PIU and UOKiK do not want to talk details at this stage. “We are working on a project associated with investment policies, which will meet consumers expectations halfway” said Jan Grzegorz Prądzyński, Chairman of PIU. “There are meetings with PIU and the Financial Supervisory Commission under way. At this stage we will not comment on this work and the results of the meetings. The issue is not resolved yet” informed Małgorzata Cieloch, UOKiK’s spokeswoman.
The KNF is not interested in resolving the “policy deposits” issue. In June it asked life insurers about the costs of extending a settlement with UOKiK for all clients. The insurers themselves are not willing to officially comment on PIU and UOKiK’s actions. Most interviewed refused to comment on the matter. Some of them admitted that they are involved in work, but do not wish to make a comment at this time. Unofficially, insurers’ representatives are more willing to talk. Some of them directly state that they are afraid of cannons that can be pointed by PiS against the industry. That is why the pace of work on a settlement with UOKiK is fast. A member of the board of one of the insurance companies estimates that the settlement with UOKiK does not have to enter into force. It is not about UOKiK’s or KNF’s objections, but is due to divisions within the industry. Freeing clients from policies imposes an enormous cost for life insurance companies – previous settlements, which included only a small group of clients could have costed the sector approximately 500 milion zloties. Additionally it does not guarantee that insurance companies will be taken off the politicians’ radars.
Listening to the PiS MP Janusz Szewczyk, vice-chairman of the parliamentary committee of public finance, it is hard to disagree with him. According to the MP, the potential compromise does not close the topic of unit-linked policies, and customers need to recover the money. – It is necessary to answer why the sale of these toxic products was possible. There is also the question of responsibility for what happened – says the MP. He does not want to judge the insurance industry’s initiative. Such an assessment will be possible after knowing the details of the solution worked out by the PIU and the UOKiK. The MP reminds that the prosecutor’s office conducts 36 proceedings on the sale of unit-linked products, and since September this issue shall be subject to works of the parliamentary committee of public finance.
The only good news for insurers is the collapse of an idea of appointing a parliamentary investigation commission to investigate on the „unit-linked insurance scandal.”
