HUNGARY: MNB suspended NOVIS unit-linked product

12 November 2019 — Cosmin CONCEATU
The National Bank of Hungary (MNB) announced the decision to temporarily suspend NOVIS life insurance product distribution after the regulator found several problems that might affect the Hungarian customers.

MNB discovered that NOVIS' "SENSUM Eletbiztositas" product was presenting misleading information about the performance indicators of the contract. MNB said that the Total Cost Indicator (TKM) was calculated using questionable methodologies, showing lower costs and possibly unrealistic high maturities; the product was also hard to compare to other similar products from the market.

As a measure of caution, MNB temporarily suspended NOVIS' unit-linked products distribution until the inspection is finished. The company's clients should not be affected by this decision, MNB mentioned.

Slovakia-based NOVIS entered the Hungarian market in 2014, offering insurance solutions cross-border, according to the EU legislation of free movement of services.

On July 2018, MNB suspended five unit-linked life insurance products of NOVIS for similar problems regarding the information and contract evolution forecasts presented to customers.

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