PZU: The FY2019 profit distribution complies with the KNF recomandation

27 April 2020 — Andrei Victor
Polish insurance group PZU (Powszechny Zaklad Ubezpieczen), one of the largest CEE insurer informed its Management Board decided to submit a motion to PZU's Ordinary Shareholder Meeting on the distribution of FY2019 PZU's net profit.

Thus, the PZU's Management Board recomandation on net profit of PLN 2.65 billion (about EUR 600 million) distribution aims its division as follows:
1) allocate PLN 7.27 million to the Company Social Benefit Fund;
2) PLN 2.64 billion to supplementary capital.

The proposed profit distribution complies with the stance of the KNF - Polish Financial Supervision Authority expressed in its letter of 26 March 2020 and sent to insurance and reinsurance undertakings in which KNF indicates that having regard for the current situation involving the epidemic announced in Poland and its possible further adverse economic consequences as well as their expected adverse impact on the insurance sector, the regulatory authority expects that insurance undertakings retain the entirety of profit earned in previous years, notwithstanding the actions previously undertaken in this area.

In addition, KNF has emphasized that it is advisable for undertakings not to take other actions without making arrangements with the regulatory authority, in particular, actions falling outside the scope of their ongoing business and operating activity that could lead to weakening their capital base.

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