New law sets new rules for insurance agents
The insurance agent must be an entrepreneur who conducts agency activity under an agency agreement concluded with an insurance company, and who is registered in the register of insurance intermediaries. The register of insurance intermediaries will be maintained by the Polish Insurance Chamber and will be kept in the form of a computerized database.
The register will be public. Everyone will have free access to the all information filed in the register. Each insurance agent will be registered after the conclusion of an agency agreement with an insurance company. All activities connected with the registration of the insurance agent must be performed by the insurance company that concluded the agency agreement. The insurance company should submit to the Polish Insurance Chamber an application regarding registration of the insurance agent within seven days from the execution of the agency agreement. The Polish Insurance Chamber will register the given agent within seven days after the application has been submitted. In addition to the organizational regulations related to insurance intermediary activity presented above, the new law also sets new requirements for persons intending to conduct insurance intermediation or agency activities.
The agency activities may be performed exclusively by persons who meet all the following requirements: " have full legal capacity
" have completed at least secondary education
" have not been convicted under a valid court verdict for any intentional offense, for an offense against life and health, for offenses connected with the administration of justice or the protection of information, documents, property, economic relationships, for a fiscal criminal offense or for an offense involving currency and securities relations
" give a warranty to properly carry out the insurance activities
" have completed training organized by an insurance company and passed an examination after the training
Pursuant to the provisions of the new law, an insurance company should grant a power of attorney to the agent, which must be in writing to be valid. The power of attorney must specify in particular the following: the scope of activity of the insurance agent, including the class, group and kind of insurance; the maximum amount of insured sum related to the insurance agreement that the agent may conclude in the name of the insurance company; and the territory of activity of the agent. The agent is not entitled to further grant a power of attorney to any third parties. However, the agent is obliged to present the client a power of attorney upon request. In addition, if the agent performs agency activities through natural persons, it is obliged to grant them a document that certifies that said persons perform activities in the name of the agent.
The new law forbids the agent to offer the client benefits that are to be gained by the client after the execution of an insurance agreement, and which are not connected with entering into an insurance agreement. In other words, the agent will be forbidden to provide the client with any pecuniary (or other) benefits for the client executing an insurance agreement with a given agent. In addition, the new law also forbids the agent to conduct insurance brokerage activity or to possess or participate as a partner, shareholder, employee or a member of the bodies of an entity that conducts insurance brokerage activity.
The new law also stipulates that an insurance agent will be eligible to perform insurance intermediation on behalf of a single insurance company exclusively. This will require multi-agents, who perform insurance intermediation on behalf of more than one insurance company, to terminate within two years after the new law comes into force, but not later than by the date of Poland's accession to the European Union, their agency agreements with insurance companies except for one company, to observe the provisions of the new law. The insurance market views this proposal as very controversial. The proposed regulation's implementation will affect small insurance companies that will suffer a rise in their costs of sales. The sales plans of most new insurance companies (conducting business for three to five years) are built on the assumption that it is less expensive and much more efficient to use multi-agents in selling their insurance products than to build their own sales networks for this purpose, which is currently very expensive and does not guarantee satisfactory sales results for the insurance company. Due to the fact that the biggest competitors in the Polish insurance market have also started cooperating with multi-agents, it is expected that the prohibition against multi-agents will be repealed during the legislative process.
Zbigniew Jahns, who focuses on the legal aspects of insurance companies, is a legal adviser at the law firm White & Case.
