Insurers can be held criminally liable for creating products with insurance capital funds – argue lawyers in Dziennik Ubezpieczeniowy  and Dziennik Gazeta Prawna. This follows an individual judgment in a civil case from the Regional Court in Warsaw which recognised a particular savings and insurance policy (polisolokata) as invalid. However, a question arises whether the assumption on that basis of the potential criminal liability of the creators of model agreements (employees and management boards of insurance companies) is not too hasty.

Ruling on the basis of a specific set of facts and quite a specific product, the Regional Court found that, by creating a product and charging liquidation fees, the insurer had “consciously sought to unlawfully deprive the insured of funds due to them” (III C 1453/13). There is no way, however, that any finding of guilt and civil liability can be directly transferred to the field of criminal law.

To speak about fraud in the context of savings and insurance policies (or products based on insurance capital funds), as suggested in the publications referred to above, all the attributes of this offence must be evident. In particular, in addition to proving that the persons responsible for the given savings and insurance policies caused the clients to disadvantageously invest their money in order to derive financial benefits, it should be demonstrated that such persons misled the clients for this purpose or took advantage of the clients being misled. It does not seem that such a situation has occurred in the case of savings and insurance policies or products with insurance capital funds; however, it follows from the grounds of the above-mentioned Regional Court judgment that, in this particular case, fraud might in fact have taken place (the court stated that the claimant was misled because “he was informed about the risk of loss in the event of downturns on the financial market – while it was the market upswing that caused him losses”). One should keep in mind that civil-law invalidity or ineffectiveness of a provision of a model agreement (or the entire agreement) due to it violating consumer rights does not mean that the person responsible for the product in question has committed fraud. The provisions of agreements and regulations, even if challenged by the court, are as a rule made available to clients prior to the conclusion of the agreement.

Filing a notice of suspicion that a crime has been committed without a strong factual basis for doing so may for the informant give rise to results opposite to the ones intended thereby. Stating by the informant that a client has allegedly been misled with regard to a concluded agreement for a savings and insurance policy in a situation in which the client was honestly informed about the product, including the risks associated with it – in particular, about liquidation fees (even if they were then challenged by a civil court), may constitute an offence of giving false notice of a crime having been committed. This is due to the fact that it is punishable to notify law enforcement authorities of a crime while knowing that it has not actually been committed.

Each case requires a careful analysis, and, one cannot be too hasty to assume the criminal liability of insurers in connection with the use of model agreements which include, among other things, a liquidation fee. Before the potential notification of the law enforcement authorities one should rather take a look whether all and not only some of the attributes of the alleged crime have been exhausted.