Operating conditions of the insurance sector in Poland were also influenced by changes introduced to other areas of economic life also, including:
Regulations on the banking sector, including the introduction of the amended Recommendation M on operational risk management at banks, which restricted the sale of policies with term deposits through bancassurance. Most of the provisions of this recommendation entered into force on 1 July 2013.
Consequences for the PZU Group: The above supervisory recommendations, which were implemented in 2013, had no effect on the level of sales of insurance products through bancassurance channels.
The Act of 6 December 2013 on the amendment to certain Acts in connection with the specification of the principles of paying out pensions from the funds collected in open-ended pension funds, which has been in force since 1 February 2014, while some of the provisions, including those regarding the Individual Pension Security Account (IKZE) have been in force since 14 January 2014. The changes include, in particular:
- the transfer of the parts of the pension rights of the members which are expressed as Treasury bond liabilities from the Open-ended Pension Funds (OFE) to the Social Insurance Institution (ZUS) – the bond part of the assets accumulated in the OFE, of a total amount corresponding to 51.5% of the units on the account of every member of the OFE as at 31 January 2013, was transferred to ZUS on 3 February 2014. After the redemption of the bonds (with effect from 4 February 2014), these funds were recorded on sub-accounts at ZUS, where they are to be indexed and inherited, just as the remaining funds on these sub-accounts. Additionally, from 3 February 2014, pension funds cannot invest in treasury securities nor in debt instruments guaranteed by the State Treasury, nor in securities issued by the governments of other OECD states;
- the specification of the principles of paying pensions from the funds accumulated in the OFE and the method of transferring pension rights of those insured with the OFE to ZUS – pensions should be paid when the insured reach retirement age (ultimately 67 years) in whole from the Social Security Fund (FUS). To this end, the funds accumulated in the OFE should be transferred to the FUS. They will be indexed according to the rules to date. Funds collected in the OFE by the insured when he reaches an age of 10 years less than retirement age will be gradually transferred to ZUS to a sub-account and the new contribution will be transferred to ZUS. Funds on the sub-accounts at ZUS, which will pay the pension, may be inherited after 3 years pass from the moment the insured retires;
- the ability of the insured to make a choice in the form of a declaration regarding the further transfer of the contribution at the new level to the open-ended pension funds, with respect to future contributions – in the period from 1 April 2014 to 31 July 2014, the insured may decide on whether the pension contribution of 2.92% is to continue to be transferred to the OFE or to ZUS. In the absence of a declaration on the transfer of the contributions to the OFE, the pension contributions will be automatically recorded on a special sub-account at ZUS. The decision on whether to choose the OFE or remain in ZUS will not be final. The insured will receive successive opportunities to change his decision in the period from April to July 2016 and then in four-year intervals;
- the establishment of new rules of investment by the OFE – the gradual reduction in the minimum limit of the OFE’s commitment to shares. It will be 75% until the end of 2014, 55% until the end of 2015, 35% until the end of 2016 and 15% until the end of 2017. A substantial proportion of the concentration limits will be eliminated. Every Fund will need to specify the objective and principles of the investment policy, as well as the quantifiable benchmark in the annual information for its members;
- a change in the system of fees and commissions charged by the pension funds – the fees charged by the funds on the contributions will be reduced from 3.5% to 1.75% (including the reduction in the charge to ZUS from 0.8% to 0.4%);
- the establishment of the level of contributions to the Guarantee Fund – 0.3% of the net asset value of the OFE is to be transferred to the Guarantee Fund administered by the National Securities Depository (Krajowy Depozyt Papierów Wartościowych SA), while the funds accumulated to date on the additional part of the Fund are to be transferred to the pension fund societies (PTE) as at 1 July 2014;
- the introduction of the ban on advertising OFEs – the advertising ban is to apply after the passage of 14 days from the date of publication of the Act until 31 July 2014 and in the periods from 1 January to 31 July in the years in which it will be possible to make a decision to re-select ZUS/OFE (so-called “windows”);
- the introduction of changes in pillar III (IKZE) – introduction of incentives for saving for retirement in the so-called third pillar. A flat-rate has been introduced for disbursements from Individual Pension Security Accounts (IKZE), which amounts to 10%. The income, which will be transferred to the IKZE will be exempt from tax, just as previously. It will be possible to pay 120% of the average monthly salary in the national economy forecast for the given year, which is currently equivalent to PLN 4,495.20 into the IKZE.
Even though the Act entered into force in 2014, work on it, and then its adoption, had an impact on the situation on the Polish capital market at the end of 2013.