The entities from PZU Group are parties in a number of court and arbitration disputes as well as administrative proceedings. The typical court disputes are those related to insurance contracts, employment contracts, and contractual obligations. The typical administrative proceedings involving PZU Group entities are those related to owned property. The proceedings and disputes are typical and repetitive and in most cases none of them is significant for PZU Group.
Most disputes involving the PZU Group entities pertain to two companies: PZU and PZU Życie. In addition, PZU and PZU Życie participate in proceedings before the President of the Office of Competition and Consumer Protection (UOKiK).
PZU and PZU Życie consider such claims when creating technical provisions for reported damages, considering the probability of an unfavorable decision of the court and estimating the value of probable settlement. Disputable claims regarding revaluation of annuities at PZU Życie are recognized in other technical provisions in the amount of annual annuity in excess of the corresponding provision amount as determined in mathematical provisions for life insurance.
In 2015 and by the date of submission of the consolidated financial statements, PZU Group entities did not take part in any proceedings before court, competent authority for arbitration proceedings or public administration authority concerning liabilities or debt of PZU or its direct or indirect subsidiary of singular value amounting to at least 10% of the PZU equity.
As at 31 December 2015, the total value of all 121,918 cases heard by courts (as at 31 December 2014: 60,534), competent authority for arbitration proceedings or public administration authority involving the PZU Group entities amounted to PLN 4,898,275 thousand (as at 31 December 2014: PLN 3,056,350 thousand). The amount includes PLN 3,131,109 thousand of liabilities (as at 31 December 2014: PLN 2,509,850 thousand) and PLN 1,767,166 thousand of debt of the PZU Group entities (as at 31 December 2014: PLN 546,500 thousand), which accounted for 25.29% and 14.28% of the PZU equity respectively (as at 31 December 2014 20.36% and 4.43% respectively), calculated in line with PAS.
All information available at the date of signing the consolidated financial statements has been taken into account regarding estimations of provisions, however that value may be subject to change in the future.