Best possible perspective

Unit-linked insurance became popular in the nineties for paying off a mortgage or to build up capital for supplementary pension. For about half of the unit-linked insurance policies sold, the costs turned out to be too high afterwards, according to the Dutch Authority for the Financial Markets (AFM) in 2008. In total, there were about 2.6 million insurance policies. Due to the excessive costs, these investment insurance policies were nicknamed usury policies.

Insurers find it important that customers with unit-linked insurance know where they stand. They are committed to offering customers the best possible perspective. For example, they have financially compensated customers with insurance whose costs turned out to be too high afterwards. Insurers and advisers have also entered into discussions with customers to see if the situation of customers can be further improved. In the future, they will continue to help customers with unit-linked insurance to improve their perspective. The Dutch Association supports insurers in this.

Initiatives by insurers

• Cost transparency. Insurers better inform customers about the costs of unit-linked insurance. Since 2008, customers who want to take out insurance have been given an overview in advance on paper with the amount of the premium, how many costs they pay and what part of the premium is invested. Customers also receive an annual overview of the costs that have been charged and insight into the development of the value of the insurance.
  
  The cost transparency is a consequence of the 'Commissie de Ruiter' that was set up by the Association in 2006. The committee's recommendations were laid down in law in 2008.
  
  
• Cost compensation. Insurers have financially compensated customers with unit-linked insurance policies from before 2008 for excessive costs. They have concluded agreements on this with two consumer foundations: the 'Stichting Verliespolis' and the 'Stichting Woekerpolis Claim'. Insurers have paid a total of around 3 billion euros to customers.
  
  
• Flanking policy. Insurers made agreements with the Ministry of Finance in 2011. These agreements ensure that customers can improve their situation, for example by adjusting their insurance, buying it off or converting it to another product. This so-called flanking policy must ensure that the customer knows what he has, knows what he is getting and is better off for the future.
  
  For example, insurers have paid the compensation for excessive costs directly into the insurance policies, so that customers are free to adjust or cancel their insurance immediately. Barriers have also been removed that make switching or adapting difficult. For example, customers no longer pay surrender costs and they can switch to a cheaper fund once free of charge.
  
  
• Aftercare policy. Insurers have activated all customers with unit-linked insurance. This means that they have given customers up-to-date information about the insurance, its (expected) value structure and have helped customers to make a conscious choice about the future of their investment insurance: continue unchanged, adjust or stop (buy off). They have also offered recovery advice. This so-called aftercare policy was laid down in law in 2015. The total overview of the activation per insurer can be found here.
  
  
• Permanent aftercare. Insurers will continue to help customers with unit-linked insurance if they need it. For example, customers who want to change their previously made choice, or customers who, despite the information from the insurer, have not yet made a conscious choice. Insurers will also continue the flanking policy. Customers therefore do not have to pay surrender costs in the future, and can switch to a cheaper fund free of charge once.
  
  Insurers will continue to monitor their portfolios in accordance with legislation for unit-linked insurance policies that – for whatever reason – still become non-constructive. Insurers approach and activate these customers and offer them a suitable solution.
  
  
• Cooperation Nibud. Together with Nibud, insurers have created a website about unit-linked insurance. On the website www.nibud.nl/beleggingsverzekeringen, customers will find information about unit-linked insurance policies with which they can prepare for the conversation with their advisor or insurer.

• Loket Hersteladvies Beleggingsverzekeringen. In order to also serve customers who no longer have confidence in their own advisor or insurer with recovery advice, the Association has created the 'Loket Hersteladvies Beleggingsverzekeringen' (Recovery Advice for Investment Insurance). During the statutory aftercare process, customers could receive free recovery advice from an advisor who is not affiliated with an insurer at this counter. In total, about 1600 people received recovery advice via the counter.
  
  
• Leniency. Insurers, in consultation with consumer representatives, have made arrangements for policyholders in a so-called distressing situation. These are situations where, after applying the general compensation scheme, the policyholder is still faced with a significant loss due to the specific product characteristics (other than the normal investor risk). A committee chaired by Dr oosting, Dr. M. Oosting, has assessed whether the insurers have correctly applied the agreed arrangement. In accordance with the decision of the two foundations and the insurers, the Committee ended its work in 2017. In the future, insurers will always assess a customer's situation on its own merits, and will offer a suitable solution where necessary.