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Mis-selling of investment-based life insurance products
In 2021, the Polish Office of Competition and Consumer Protection imposed a fine of 20 million Polish zloty (€4.5m) on the Polish insurer Open Life for mis-selling investment-based life insurance products to Polish consumers. The Office of Competition and Consumer Protection found that Open Life had sold unit-linked life insurance contracts to consumers that were not in line with consumers’ needs and their risk profile. As a result, many consumers of Open Life invested in investment products that were much riskier than they were led to believe.
Under EU law, financial advisers are required to verify that the investment products offered to consumers are in line with their financial needs, investment knowledge and risk profile. If financial advisers assess that a product is not in line with the risk profile of the consumer, financial institutions are required to refrain from selling the product to the consumer. Open Life was found by the Polish Office of Competition and Consumer Protection to have offered risky investment funds (such as risky venture capital funds) to consumers who had indicated that they were only willing to take on a moderate investment risk. The practices took place from 2016 to the second half of 2018. The decision is not final, and the company Open Life may decide to appeal the decision.