Consumer organization claim against NN Group amounting to billions
On 27 March 2017, two consumer organizations, de Consumentenbond and Stichting Wakkerpolis, instituted collective actions against NN group. The consumer organizations claim to represent 500,000 clients who had concluded unit-linked insurance policies with NN Group from 1990 through 2008. They assert that NN Group acted wrongfully by failing to fulfil its duty of disclosure and duty of care regarding certain 'first costs' charges. The total claim amounts to EUR 3.2 billion.
The dispute regarding unit-linked insurance policies and first cost charges has dragged on for years now and the current claim is likely an attempt to pressure NN Group to commence settlement negotiations. Under current Dutch Law it is not possible to obtain collective compensation for damages, however, a claim to obtain collective compensation might become possible when the legislative bill regarding collective actions is passed (possibly later this year). Current Dutch Law does permit a binding settlement agreement for up to 500,000 clients. Individuals that do not want to be bound by collective settlement are able to opt-out.
If the court declares that NN Group acted wrongfully, NN Group will face claims amounting to billions. Many questions regarding NN Group’s professional indemnity insurance are expected, especially since the compensation would include both repayment of received 'first costs' as well as additional compensation, like interest.
The collective action is based on a 29 March 2009 decision of the Financial Services Dispute Committee (Geschillencommissie Financiële Dienstverlening, “Kifid”), in which the Committee held that NN Group failed to fulfil its duty of disclosure and duty of care towards a policyholder. NN Group did not provide the policyholder with sufficient information regarding the charge of certain 'first costs'. According to Kifid, additional information regarding these first costs was required to allow a proper understanding of the policy.
Therefore, Kifid ruled that the policyholder should be compensated for these 'first costs' charge. NN Group appealed this Kifid decision and the outcome is expected at the end of April.
For more information regarding the claim against NN Group or collective actions in general you can contact Bas Baks or Leonard Böhmer.
Article on Law-Now: Consumer organization claim against NN Group amounting to billions