Insurance company ASR has agreed to pay extra compensation to thousands of consumers who lost out financially because of the high charges they had to pay on investment-based savings accounts.
ASR, which took over Aegon Nederland earlier this year, has reached a deal with five organisations that had been claiming compensation on behalf of ASR and Aegon policyholders. In total, ASR has agreed to pay out €250 million to settle the claims.
“With this final settlement, we can close this file and give customers clarity,” said ASR chief executive Jos Baeten in a statement. The agreement will not affect the company’s capital or dividends, Baeten said.
The so-called ‘woekerpolis’ affair was brought to light in 2006 by TV consumer show Radar, following an investigation by the Dutch financial markets regulator AFM. The AFM said hidden costs meant many customers paid more to cover their investments than they earned from them.
Altogether around half a million people took out similar products from various insurers between 1990 and 2008.
Clients paid a monthly fee, expecting a large payout at the end of the period – usually 20 or 30 years – but then discovered much of their investment had gone on costs, including fees to selling agents.
Various settlements totaling some €3 billion have already been reached between clients and insurance companies over the past few years. But some clients are not satisfied with the deals that have been made and are pressing ahead with their claim for more compensation
In September, appeal court judges said that a large part of the costs paid by NN Group clients was unjustified and described information provided by Nationale Nederland as “unfair”.
In one case cited by the court, almost half the €8,500 annual investment by one client went on life insurance. This should have been made far more explicit in the documentation, the court said.
Cases are also under way against Reaal, which is also now part of NN, and Achmea. NN has said it will appeal against the September appeal court ruling.