Insurance Supervisory Authority: Blomqvist case can lead to further lawsuits

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The aggregate reserves of Nordea Bank’s Selekta endowment insurance scheme includes deposits worth approximately EUR 6 billion.
      A total of 140,000 customers have signed such a policy, with an average investment of EUR 43,000 each.
      As reported yesterday, Nordea’s clients Åke and Leena Blomqvist, who had invested EUR 2 million in Selekta insurances between 1999 and 2000, are to be refunded the EUR 1 million plus interest they lost while keeping their money in mutual funds.
      According to Jukka Venäläinen, the Managing Director of Nordea Life Assurance Finland Ltd., the bank’s other customers have ”no reason” to pursue lawsuits, as the Blomqvists are a special case, from which ”no general conclusions can be drawn”.
     
The Court ruled that the brochures, the terms and conditions of the agreement, and the price list, which the couple had been given, were not enough to warn them of potential investment risks linked with an endowment insurance policy.
      Blomqvist claims that in the negotiations between him and the bank manager he was not warned of any risks relating to the funds, while an annual yield of 10 per cent was promised for the investment.
     
Managing Director Venäläinen notes further that they are now considering carefully whether or not they will appeal against the court decision to the Court of Appeals. The deadline for the application is May 23rd.
     
Director Erja Rautanen from the Insurance Supervisory Authority says that the decision was welcome as it sets certain rules considering the interpretation of insurance counselling.
      ”This decision can naturally also lead to new lawsuits, when customers start examining their old insurance policies”, Rautanen notes.
      Rautanen estimates further that the brochures and agreements relating to endowment insurance policies have clearly improved over the past decade.
      However, these brochures are not preaudited, while all other investment material issued by banks is. Moreover, through these insurance products it is possible to invest in the same securities as directly at the bank counter.
     
”The point is that all necessary information has to be given to the customer, just as the court ruled”, Rautanen concludes.


Previously in HS International Edition:
  Nordea Bank to reimburse customer for lost funds (13.5.2008)

Links:
  Insurance Supervisory Authority

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