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53.2.1 Fine imposed in 2009 for standard agreements
In a decision of 30 December 2009 the President of the Office of Competition and Consumer Protection imposed a fine on PZU of PLN 14,792 thousand for the use of practices that infringe the collective interest of consumers consisting of:
- including contractual provisions listed in the Register of prohibited contractual provisions in the standard agreements;
- including contractual provisions which infringe Article 813.1 of the Civil Code by citing the unused sum insured as the condition for the amount of premium reimbursed to the consumer by the insurance company due to unused insurance period whereas the Article does not refer to such condition.
PZU does not agree with both the decision and its statement of reasons. After several years of proceedings, on 6 November 2013, the Appellate Court in Warsaw changed the judgment issued by the Court of Competition and Consumer Protection ("SOKiK") dated 18 January 2013 through reversal of the decision of the President of the Office of Competition and Consumer Protection dated 30 December 2009 in part, dismissal – as regards the contractual clauses in contravention of Article 813.1 of the Civil Code – of PZU’s appeal of 18 January 2010, reduction of fine to PLN 1,644 thousand. The judgment of 6 November 2013 is final and was executed through the payment of the awarded financial penalty effected by PZU. 23 June 2014, PZU filed a cassation appeal to the Supreme Court against the judgment. On 24 July 2014, PZU received a response of President of Office of Competition and Consumer Protection to its cassation appeal. On 28 January 2015, the Supreme Court issued the decision accepting the cassation appeal for consideration. 9 September 2015, the Supreme Court dismissed the cassation appeal of PZU. The judgment is final and without appeal.
53.2.2. Fines imposed in 2011
53.2.2.1 Reimbursement of the costs of rental of a replacement car
In a decision of 18 November 2011, the President of the Office of Competition and Consumer Protection imposed a fine on PZU of PLN 11,287 thousand for the use of practices that infringe the collective interest of consumers, as described in Article 24. 1 and 24.2 of the Act on competition and consumer protection (Journal of Laws No. 50 of 2007, item. 331, as amended) consisting in limitation of the scope of liability of PZU towards consumers that submit claims under the insurers’ guarantee liability due to compulsory civil liability insurance of an owner of a motor vehicle by:
- refusing to acknowledge that the loss of the possibility to use the damaged car is a property damage and agreeing to pay damages for the rental of a replacement car only if the injured party presented specific circumstances necessitating the rental of a replacement car;
- leaving out the period necessary for the garage to obtain spare parts from the calculation of the reimbursement for the costs of rental of the replacement car;
and demanded that the practices be discontinued.
The Management Board of PZU does not agree with the decision and its legal and factual statement of reasons. On 5 December 2011, PZU appealed against the decision (thus the decision did not become valid).
At a trial held on 2 December 2013, the District Court in Warsaw passed a judgment whereby PZU’s appeal was dismissed and the costs of legal representation were awarded from PZU to the President of the Office of Competition and Consumer Protection. On 23 December 2013, PZU appealed against the decision. At the hearing on 17 December 2014, the Appellate Court issued a decision suspending the above proceedings until the Supreme Court settles the legal issue that raises serious doubts regarding a different case pending before the Appellate Court. At the hearing on 9 September 2015, the Supreme Court ruled in favor of PZU, stating that in relation to the insurer, in an event covered by the compulsory TPL of the motor vehicle's owner, the claimant involved in a traffic accident does not have a status of a consumer. As a result of the Supreme Court's consideration of the above mentioned legal issue, the Appellate Court in Warsaw resumed the proceedings and closed the case during its session of 26 January 2015. The delivery of the judgment was postponed to 1 February 2016. By judgment of 1 February 2016, the Appellate Court allowed the appeal of PZU and changed the decision of the District Court in Warsaw in its entirety, annulling the decision of the President of OCCP o 18 November 2011 in its entirety, and adjudged the return of proceeding’s expenses by the President of OCCP in favor of PZU. The judgment of the Appellate Court is final and non-appealable. On 2 February 2016, PZU submitted a request concerning delivery of the judgment of the Appellate Court and the substantiation. The President of OCCP submitted similar request on 3 February 2016.
In light of the above, PZU released the maintained provision in the amount of PLN 11,287 thousand.
53.2.2.2 Sale of a group accident insurance
In a decision of 30 December 2011, the President of OCCP imposed a fine on PZU of PLN 56,605 thousand for the use of practices that limit competition and infringe the prohibition specified in Article 6. 1.3 of the Act on competition and consumer protection following an agreement concluded by PZU and Maximus Broker Sp. z o.o. with its registered office in Toruń ("Maximus Broker") that limited the competition in the domestic accident group insurance for children, youth and staff of educational institutions by dividing the market between the entities – the customers of PZU in the Kujawsko-pomorskie region were serviced by Maximus Broker in exchange for recommendation of PZU insurance to those customers. The Office demanded that the practices be discontinued.
The Management Board of PZU refuses to agree with the facts and legal reasons presented in the decision, because the decision does not consider all the evidence and the legal classification was incorrect.
On 18 January 2012, PZU appealed against the decision (thus the decision did not become valid). In the appeal PZU pointed that:
- PZU and Maximus Broker did not conclude any agreement apart from the agreement concerning brokerage fees;
- the President of the Office of Competition and Consumer Protection is wrong in the understanding of insurance contracts concluded via a broker;
- majority of insurance contracts concluded via Maximus Broker was concluded with insurance companies other than PZU;
- PZU and Maximus Broker cannot and could not carry out competitive activities in their markets.
On 22 October 2012, PZU received a response of President of OCCP to its appeal. On 27 March 2015, CCCP issued a judgment overruling the decision of the President of OCCP of 30 December 2011. On 21 May 2015, the President of OCCP filed an appeal. On 24 June 2015, PZU filed its response to the appeal of the President of OCCP.
PZU recognized a provision for the above fine, whose amount both as at 31 December 2015 and 31 December 2014 was PLN 56,605 thousand.
