Consumer organizations, the Association of Citizens’ Advice Centers and Fraudulent Clients filed a lawsuit against Česká pojišťovna and Generali. According to the organizations, both unlawfully charge illegegal life insurance fees and should stop doing so immediately. The contested insurance companies claim that all contracts are in order.
Both consumer organizations also want the Czech National Bank to postpone the merger of Česká pojišťovna and Generali. They also called on the CNB to stop defending the interests of foreign shareholders in the investment life insurance case, but to protect damaged clients. The decisions of the Financial Arbiter and the courts on incorrectly charged fees, with their consequences, can affect nearly two million insurance contracts.
“The institute of collective action is still missing in the Czech legal order, so we have filed a lawsuit that should at least prevent Česká pojišťovna and Generali from illegally levying fees related to investment life insurance. We rely on the decisions of the Financial Arbiter and the general courts. Therefore, we believe that we will succeed quickly and protect fraudulent clients. Česká pojišťovna did not respond to the pre-litigation appeal, we will file a lawsuit today or tomorrow (Wednesday),” said Jiří Chvojka, a member of the committee of the Cheated Clients Association.
Česká pojišťovna claims to have never broken the law when arranging insurance.
“Generali has always followed the law. This is confirmed by several recent judgments when the court confirmed that the consumer received complete contractual documentation on the insurance contract and found the submitted documents sufficient and complete,” added Jan Marek, a spokesman for Generali.
According to a representative of the Association of Civic Counseling Centers Hynek Kalvoda, the counseling centers of this association have recently received more inquiries due to the loss of money in investment life insurance. “Based on the analysis, we concluded that this was a systemic problem and welcomed the opportunity to actively coordinate our actions with the Cheated Clients association to protect harmed consumers,” he added.
According to the district courts, the passages of contracts are invalid.
The District Courts for Prague 1 and Prague 2, according to attorney Jan Dáni, have repeatedly stated that the key passages of the insurance terms of both Česká pojišťovna and Generali contracts are invalid, with hundreds of decisions of the Financial Arbiter in favor of injured clients. “We do not want clients harmed as part of the merger between Česká pojišťovna and Generali,” Dáňa added.
“There are different judgments. As part of its creative work with information, the association always publishes only a carefully selected part of the information,” said a spokeswoman of Česká pojišťovna Buriánková. An essential fact, in her opinion, is that in August, the association failed with a similar suit at the Municipal Court in Prague. This is another attempt to attack the insurance company, this time with another partner, she said.
The association calls on the Czech National Bank to start solving the situation. According to Chvojka, the CNB should carefully consider its steps and allow the proposed merger only when it is clear that the position of the damaged clients will not deteriorate, especially in the case of the merger of two insurance companies. Legal defects are proven to affect millions of contracts, added attorney Viktor Rossmann, who prepared the suit.
In May, the Consumer Subcommittee of the Chamber of Deputies asked the CNB for information on how to deal with consumer complaints about incorrectly charged fees and costs and incorrectly determined surrender and surrender in investment life insurance products.
The majority of court decisions concern Česká pojišťovna contracts. According to the information provided by the association in disputes with this insurance company, the Arbiter has not yet decided to the detriment of the client if the dispute concerned an investment life insurance contract concluded between 2005 and 2013. The CNB had previously stated that it was acting within its activities legal powers, which do not include the assessment of the validity of contractual arrangements between insurance companies and individual clients.