"The insurer has remedied several shortcomings during the investigation, its financial indicators, profitability and capital adequacy still show a reliable picture. (...) Although the Central Bank has identified a number of significant deficiencies, these do not fundamentally affect the sound operation of the insurer," MNB commented in a recent press release.
As the investigation revealed that the insurer did not meet the deadline available for the evaluation of offers in its unit-linked life insurance portfolio. The practice of paying premiums was in breach of the rules, and the insurer did not deduct the costs of account management (and, in the case of exempt contracts, maintenance costs) in accordance with the terms of the contract. The content of the annual notification letters was also incomplete.
In the case of compulsory motor third party liability insurance (KGFB), the insurer has repeatedly violated its obligation to provide information to the claims and policyholder and the operator.
With regard to its outsourcing activities, the MNB identified deficiencies in the definition of key activities at Aegon Biztosito, in the field of outsourcing registration and notifications, and in the notice period for outsourcing contracts.
In the area of IT (IT), there were irregularities in the anonymization of data used in the test environment, the application of up-to-date security updates, the use of technical identifiers and the management of related passwords, and backup reports.
The MNB investigation also found violations of the law in the contractual terms of life and non-life insurance products. Clients were not fully informed about the products' key information (KID) and the loss-bearing capacity of some clients was not fully assessed. The insurer's complaint handling policy was also incomplete, difficult to reach, it was not possible to book an appointment for personal administration at all times and problems arose in the handling of telephone and oral complaints as well. The rules for responding to complaints in a timely manner and for providing information on remedies have also been breached.
"Due to these violations, the MNB imposed a supervisory fine of HUF 45 million and an additional consumer protection fine of HUF 15 million on Aegon Biztosito in a decision published today [12 November 2020], obliging it to operate in accordance with the law. The insurer must inform the Central Bank in writing by 31 March 2021 of the measures it has taken to eliminate the violations," MNB stated.
MNB mentions that the amount of the fine was influenced, among other things, by the fact that several violations of the law were due to the insurer's inadequate data processing, registration and control system for a long time. In addition, shortcomings in the content of customer contracts were repeated and detriment of customers' interests and breaches of additional consumer protection provisions were identified. Aegon Biztosito had already remedied several deficiencies during the Central Bank investigation and reported on its related plans which meliorated the situation.
* for an exchange rate of EUR 1 = HUF 360,49