The Polish Insurance Association approved the recommendation of good information practices regarding policies with the insurance capital fund (icf). Owing to the recommendation, customers will obtain more clear information about products with the use of which they intend to allocate savings. In comparison with the initial version of the recommendation which was presented by PIU in April 2013, some provisions were supplemented or specified:
- Data Sheet was explicitly defined as an information document and not a part of an insurance contract;
- The risk of losing all funds was emphasised;
- Quota determination of fees while performing simulations of insurance history was introduced;
In the case of simulations, it was highlighted that the actual insurance history may be different from exemplary calculations.
Product Data Sheet remains the most important part of the recommendation from the customer’s perspective. The recommendation requires that each customer considering insurance with icf is provided with the data sheet. The Product Data Sheet needs to state:
- Information on all fees connected with the service; Particular names of fees will be identical at each insurance company where this recommendation applies;
- Information on the level of risk connected with an investment;
- Three variants of insurance history (basic variant, reduced profitability variant and increased profitability variant).
— I would like to remind you that according to the recommendation, it is unacceptable to use marketing jargon or insurance terminology in the Product Data Sheet — reminds Jan Grzegorz Prądzyński, CEO at PIU. Representatives of insurance community and organisations protecting consumers had the possibility to submit their remarks to the draft during the last few months. The document was supplemented with proposals from the Ministry of Finance, the Polish Financial Supervision Authority, the Office of Competition and Consumer Protection, the Polish Insurance Ombudsman, and the Polish Bank Association.
Among many postulates regarding the Product Data Sheet, there were multiple proposals to reduce its volume. — At the same time, we were requested to add new elements to the Data Sheet. For obvious reasons, these two demands are impossible to meet simultaneously. Thus, we opted for leaving a few-page volume, while including the largest possible amount of necessary information — explains Marcin Łuczyński, Member of the Management Board of PIU.
At the latest meeting of PIU with PFSA, it was agreed that on 1 May 2014, the text of the recommendation and a list of insurers applying it is going to be published on the PFSA website. — I am convinced that companies offering products with icf will accede to the recommendation. However, the deadline for adjustments is exceptionally ambitious. Insurance companies which carry out sales through a large number of external partners will be faced with the most difficult task. However, we must not forget about the most important thing — the recommendation is open and each entity may accede to it at any time. Even if the deadline of 1 May 2014 is impossible to meet by any of the insurers, they will simply implement the recommendation at a later date. It is important for a given insurer to declare that they want to accede to it — says Jan Grzegorz Prądzyński.
Within the next few weeks, the Chairman of the PFSA will issue a letter to insurance companies expressing his support for the PIU recommendation. The letter is also going to include information that compliance with the recommendation will positively influence the BION (Supervisory Review and Assessment). — Acknowledging the PIU recommendation as an assessment criterion for insurance companies shows its significance and fundamental role for customers of insurance companies — believes Marcin Łuczyński.
Also Gabriel Bernardino, Chairman of the EIOPA (European Insurance and Occupational Pensions Authority) requested PIU to provide him with materials regarding the recommendation. During his recent visit to Poland, he was interested in the initiatives of the Polish market with respect to good practices in the bancassurance market and icf. — We are pleased that EIOPA is interested in our projects. I hope that our work proves to be helpful while working on different kinds of European regulations connected with insurance — states Jan Grzegorz Prądzyński.