Polish insurance firms facing an avalanche of class-action lawsuits
Class-action lawsuits are increasingly popular among disgruntled customers.
A number of the largest insurance firms operating on the Polish market are facing imminent class-action lawsuits from customers that demand a refund of liquidation fee charged by insurers upon withdrawing from an insurance policy, the Polish media reported in April 2014.
“The lawsuits are ready,” Anna Lengiewicz from Polish law firm LWB said in an interview, as quoted by Puls Biznesu on April 2. “We are awaiting the final documents to be sent by our clients, then we are going to submit them to court. They will most likely be submitted in the first half of April.”
The law firm LWB has already filed two class-action lawsuits: one at the end of 2013 against Aegon on behalf of 168 individuals, and another one in January 2014 against Skandia on behalf of 104 insurer’s former clients, who demand a refund of a total of PLN 1 million charged by the insurer as liquidation fee. The law firm is shortly going to submit three new class-action lawsuits.
According to Puls Biznesu, plaintiffs are demanding the refund of liquidation fees that insurers charged them when they decided to liquidate policies. In some cases, the liquidation fee was so high that it entirely cancelled out the balance that the client had accumulated on the policy, leaving him with no policy paid out at all.
The lawsuits arose following an October 2012 ruling by the Polish consumer protection watchdog UOKiK in a case against Aegon. The regulator ruled that the insurer’s practice of imposing liquidation fees on clients who wished to liquidate their policy prematurely was against the law. UOKiK added liquidation fees included in Aegon’s contracts with its clients to the list of abusive contract terms, a revolutionary decision that triggered various initiatives by dissatisfied clients wishing to peruse their rights jointly through the courts.
Although the number of people who have decided to join the class-actions suits is limited, the outlook for the insurers in Poland can potentially be devastating. Should these lawsuits receive favorable rulings, they will gain more attention and might attract more customers to follow suit. Five million Poles have an insurance policy and the total value of the life insurance segment is estimated to be some PLN 48 billion in 2013.
