Nowa Rekomendacja U

On June 26, 2023, the Polish Financial Supervision Authority (KNF) adopted revised Recommendation U on good bancassurance practices. The main objective of Recommendation U is to set out a common standard for financial institutions that are engaged in the distribution of insurance products (bancassurance) and to develop a corresponding „best practices“ framework. The document thereby covers numerous issues in this context, ranging from the development, maintenance, and monitoring of policies and practices as regards bancassurance engagements, to the information that needs to be provided by banks to clients in relation to an insurance product, to the implementation of policies and procedures to prevent conflict of interests. According to the announcement of the KNF, a key focus of the new version is to ensure that insurance products offered under bancassurance provide appropriate value to customers.
The previous version of Recommendation U had been in effect since 2014. Since then, the market has undergone significant changes, impacting the operations of all entities involved in the bancassurance sector. The updated Recommendation U therefore expands its scope to include cooperative savings and credit unions and introduces several new provisions to
– ensure that insurance products offered under bancassurance, such as credit or loan repayment insurance (referred to as CPI products), deliver suitable value to clients.
– define the method for offering insurance products within the bancassurance framework.
– address the relationship between banks and other financial institutions engaged in bancassurance and the insurance provider. Thereafter, insurance providers are responsible for covering the insurance costs of the financial institution.
– monitor processes related to the offering of insurance products by institutions, e.g. through the internal control system, risk management systems, and the oversight of the audit committee.
The KNF expects banks to comply with the revised Recommendation U by July 1, 2024, while credit unions are required to comply no later than January 1, 2025.