It is still unclear whether an insurer can block consumer claims in relation to clauses limiting the disbursement of funds from unit-linked policies (UFK). This is due to the refusal of the Supreme Court to adopt a resolution that would dispel doubts of the entire insurance industry in Poland. The Supreme Court considered the question put to it as too general, which prevented it from giving a specific, and at the same time, universal, answer that would apply to all types of unit-linked insurance products.
On 3 December 2015 the entire Polish insurance market held its breath, because the Supreme Court’s resolution could have had far-reaching effects. It was to decide whether the main benefit in a unit-linked policy is the disbursement of an insurance benefit to a consumer when the consumer has terminated the contract prematurely. If so, clauses on the liquidation fee or the reduced surrender benefit (Polish: świadczenie wykupu) – which reduced the disbursement of funds accumulated in a unit-linked policy - would not constitute illegal (abusive) provisions, and consumers could not sue insurers in connection with the application of such clauses (unless they are ambiguous). However, this issue remains open.
To date, the case-law has been divided, although siding strongly with consumers. In this sense, although formally the clash before the Supreme Court has not resolved doubts, for insurance companies it is extremely important, because the Supreme Court did not consider the surrender benefit as a side benefit, which in individual or group matters could settle this particular issue. Meanwhile, there are a number of arguments for considering the surrender benefit as the main benefit under a unit-linked policy, including those referring to the aim of the conclusion of the policy and the key importance of the surrender to the policyholder.
It seems that despite the multiplicity of structures available in unit-linked policies – as regards, inter alia, the surrender value, the surrender benefit, the liquidation fee – the Supreme Court should be able to provide a clear answer to the question. Furthermore, according to the very act on insurance activity, each unit-linked product, regardless of its structure, must specify the surrender value of the policy. A secondary issue - but equally important - are the provisions defining the size of the surrender benefits, which actually have diverse structures, naming and often result in a very different value disbursed to the insured.
The only option is to wait for a written justification, in which - perhaps - the Supreme Court will give instructions regarding how the legal question should have been formulated. If during the next challenge before the Supreme Court, we get a clear answer as regards this important issue for the entire market, we will notify you in a separate Law-Now alert.
decision of the Supreme Court of 3 December 2015, III CZP 87/15