Fined PZU Zycie is going to appeal

MG
30-10-2007, 13:58

Warsaw (Puls Biznesu) – The antimonopoly office fined PZU Zycie insurer with over PLN 50m (EUR 13.7m) of fine because of  provisions disturbing rival companies.

The provision made it very difficult to change the insurer in case of group life insurance in companies.

“According to the rules so far, 75 percent of insured employees had to agree to change the insurer.

“The practice went on for over 10 years”, Marek Niechcial, the CEO of Office of Competition and Consumer Protection (UOKiK) said.

The requirement discouraged from changing the insurer. The guilt was so big in the opinion of the office that it decided to fine PZU Zycie with PLN 50m, the highest ever fine on the insurance market.

PZU Zycie representatives do not feel guilty.

“We are going to appeal. We don’t agree with the fine itself, nor with its amount. We have not used the provision in question for three years already”, Tomasz Brzezinski, PZU group spokesman said.

He added that with such a high fine, the company will have to make reserves which will adversely affect PZU group financial results. Although the fine is of record high, it won’t disturb the giant. In the first half of the year, PZU group had PLN 2.62bn of net income. PZU Zycie alone generated PLN 1.49bn of net income.

(PLN 1 = EUR 0.275)

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