Consumers who take out extortion policies with insurance companies ASR and Aegon Nederland will receive additional compensation. ASR, which acquired Aegon Netherlands at the beginning of this year, signed agreements with five claims companies for this purpose. They waive further lawsuits in exchange for 250 million.
This ends a long legal battle for ASR. “The legal process will take a very long time and bring great uncertainties to us as a company and to our customers,” says ASR CEO Jos Baeten. “So we looked to see if we could address this issue another way.”
“This is a victory for consumers,” says Sandra Molenaar, director of the consumer association. This is also the opinion of lawyer Adriaan de Gier from the Wakkerpolis Foundation. Otherwise, he believes that the case will drag on for a long time.
300 different products
How much policyholders who join claims clubs receive varies from person to person. This will be at least several hundred, sometimes several tens of thousands of euros. In addition, ASR allocates 50 million euros for customers not affiliated with demand clubs and for emergencies.
The system is valid for approximately 300 different products offered so far by Aegon and ASR, including Aegon Koersplan, Fundplan and Vermogensplan. The prerequisite is that at least 90 percent of the participants in the betting clubs agree.
legally disputed
Organizations such as the consumer association, Woekerpolis.nl and Wakkerpolis have long been involved in legal conflicts with insurance companies that sell exorbitant policies. At the end of September, the appeals court in The Hague ruled that Nationale Nederlanden and Aegon wrongly charged customers high costs for so-called “investment insurance”.
The insurer was instructed to reimburse the injured parties for costs and lost proceeds through what became known as a usury policy. Following the victory of the three compensation organizations, NN and ASR announced that they would file a lawsuit in the Supreme Court. ASR has decided not to do this anymore, but NN still wants to take this step.
Not a savings product
Extortion policy was invented in the 1990s when insurers introduced “investment insurance” for consumers. Anyone looking to save for retirement or a home can achieve higher returns than a regular savings account.
But what many investors mistakenly thought was a savings product was actually a fixed-term investment. The risk of loss belongs entirely to the insured. Even when stock markets crashed after the turn of the century, costs were unexpectedly high.
Customers who realized which product they were stuck with experienced great sadness by not being able to cancel the product. The result was shocking stories. That is why investment insurance was called usury policy. According to the consumer association, 7 million usury policies with a total value of 100 billion euros have been sold in the Netherlands since 1993.
Source: NOS
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
