Union Insurance misled consumers about its life insurance
The Hungarian Competition Authority established in its decision reached on 8 March 2007 that Union Insurance Company (Union Biztosító Zrt.) deceived consumers as from April 2006 with the advertisement of its 'Union-Smaragd' product.
Union Insurance Company started to sell 'Union-Smaragd' through more than one distribution channel (insurance agents belonging to its own network, independent insurance agents, insurance brokers). 'Union-Smaragd' is a life insurance with one-time payment connected to investment funds. An essential characteristic of the insurance is that Union grants a bond credit depending on the way in which premiums are paid.
Union advertised 'Union-Smaragd' in different ways from April 2006 on.
The GVH established in its decision that some statements of the information on 'Union-Smaragd' may have been misleading for consumers, e. g. it did not correspond to reality that
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The total amount of money paid by the contracting party and of that originating from the bond credit was invested;
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If the contracting party had his savings in Euro he could eliminate exchange rate risks;
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Money could be taken out on favourable terms from the investment;
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In the event of an accidental death the amount paid by Union over the actual value of the policy qualified as an extra service;.
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The insurance company provided the cover of traffic accident, for free, as a gift.
Union was fined HUF 3 million for the infringement of the law.
Case-number: Vj-154/2006
Budapest, 12 March 2007
Hungarian Competition Authority
Communication Group
Further information:
András Mihálovits
Hungarian Competition Authority
Address: 1054 Budapest, V. ker., Alkotmány u.5.
Mailing address: 1245 Budapest 5. POB 1036
Tel.: +36-30 618-6618
Email:
Mihalovits.Andras@gvh.hu
http://www.gvh.hu