Following a review of the marketing linked to endowment insurance policies for consumers, the Swedish Consumer Agency is now criticising a number of insurance companies with regard to aspects including their risk information and contractual terms and conditions.
The criticism is based on what is referred to as a thematic review, carried out by the Swedish Consumer Agency in 2022, of insurance companies’ marketing, pre-purchase information and contractual terms and conditions for endowment insurance policies. The Swedish Consumer Agency is now criticising the risk information provided for endowment insurance policies by a number of insurance companies. That criticism is aimed at the fact that risk information is either completely lacking or is not placed in a sufficiently prominent position when marketing the insurance policies. The Swedish Consumer Agency’s criticism appears to be based on a broad interpretation of the scope of the Swedish Consumer Agency’s industry agreement with the Swedish Investment Fund Association (Fondbolagens Förening) regarding rules for the marketing of funds, BÖ 2022:08. The Swedish Consumer Agency refers to the fact that paragraph 7 of the industry agreement states that, when marketing funds, it must always be stated that investments involve a risk and this information must be placed in a prominent position. Therefore, according to the Swedish Consumer Agency’s interpretation, the industry agreement constitutes good marketing practice and the requirements it contains also apply to the marketing of other financial products. For marketing endowment insurance policies, the Swedish Consumer Agency appears to justify this by the fact that endowment insurance policies usually contain various types of securities. Since the insurance companies criticised by the Swedish Consumer Agency have not fully complied with the requirements of the industry agreement, the Swedish Consumer Agency considers that the marketing is contrary to good marketing practice and is unfair.
We consider that the Swedish Consumer Agency’s interpretation of both the applicability and the scope of the industry agreement is flawed. As a basis for its assertion that the industry agreement constitutes good marketing practice and should also be applied to financial products other than funds, the Swedish Consumer Agency refers to two judgments handed down by the Market Court (MD 2010:31 and MD 2010:6). We consider that neither of these judgments provide clear support for the Swedish Consumer Agency’s interpretation. Nevertheless, it may still be true that the insurance companies have been deficient in their marketing and in providing information, since the insurance distribution regulations require insurance companies, when distributing insurance-based investment products such as endowment insurance policies, to provide their customers with suitable, easily comprehensible guidance and warnings about the risks associated with the insurance policies.
We recommend that insurance companies see the Swedish Consumer Agency’s criticism as a reminder to review their risk information to ensure that it meets applicable requirements for clarity and suitability.
