Poland: The Polish FSA adopts Recommendations on Insurance Distribution

The Polish Financial Supervision Authority (the “Polish FSA”) has adopted final recommendations for insurance undertakings on insurance distribution (“Recommendations”). The Recommendations were published on 29 June 2026 (link).

The Recommendations replace the Polish FSA’s 2014 distribution guidelines (link).

This is a major development when it comes to insurance distribution in Poland as the new Recommendations are very extensive, including 29 recommendations (on 24 pages; just as a comparison – the replaced Polish FSA distribution guidelines included 12 recommendations on 13 pages). 

The Recommendations will apply from 1 July 2027 (with exception for the savings component of life insurance products under Recommendation 7.9, which will apply from 1 July 2028).

Foreign intermediaries within the scope

The Recommendations shall apply accordingly to the cooperation of insurance companies with entities entered in the relevant register of intermediaries in a European Union Member State other than the Republic of Poland, which carry out agency activity or brokerage activity on the territory of the Republic of Poland through a branch or otherwise than through a branch, within the framework of the freedom to provide services. This will apply to Recommendations 11 to 23 (covering oversight of, support for, and remuneration of agents and brokers, including corrective/sanction measures for non-compliance). It should be noted that this is a quite unique approach by the Polish FSA as the Recommendations, despite being addressed at insurance companies, will have a material impact on foreign intermediaries’ activities in Poland.

Product value and minimum claims ratio (Recommendation 7)

As a general rule, insurers are expected to ensure that distributed products offer adequate value to customers and do not undermine confidence in the financial market. This requirement is not met where the present value of expected claims and benefits (excluding claims handling costs) is lower than:

• 30% of the present value of expected gross premiums; or
• 20% for low‑premium products (below EUR 2.5 per month or EUR 30 per year).

The minimum value requirement, previously applied mainly to CPI products under the Polish FSA Bancassurance Recommendation U (link), is now extended across distribution channels and product types. At the same time, the Recommendations provide for important exclusions, including products subject to existing product intervention measures, large risks insurance, annuities, insurance guarantees and selected pension products on the Polish market.

For life insurance products with a savings component, the Recommendations introduce a separate cost impact test, with a maximum annual impact of 2.65%.

Remuneration and incentives (Recommendation 15)

Insurers are expected to maintain internal policies governing remuneration of employees, agents and other distributors, including optional variable remuneration and incentive schemes. The focus is on ensuring that remuneration arrangements do not conflict with the obligation to act in the best interests of customers.

The use of qualitative criteria is expressly recognized as an appropriate element of remuneration frameworks. It is worth noting that the Polish FSA provides list of examples of qualitative criteria that could be used, inter alia: 

1. the number, causes, and validity of complaints;
2. the results of mystery shopping surveys;
3. the results of customer satisfaction surveys;
4. the number or rate of withdrawals from insurance contracts and terminations of insurance contracts, and the reasons therefor;
5. the reasons for refusals to pay out benefits;
6. the reasons why clients bring benefit payment claims to court; and
7. conclusions arising from court rulings.

Cooperation with agents (Recommendations 11 – 20)

While insurers are still expected to exercise effective oversight of agents, the Recommendations emphasize:

1. monitoring compliance with legal and registration requirements;
2. providing agents with guidance, instructions and substantive support; and
3. taking corrective measures before sanctioning where necessary.

This is also quite a new approach as the Recommendations establish a clear and unambiguous basis upon which agents may request assistance from the insurer. 

Assessment of customer demands and needs (Recommendation 8)

The Recommendations adopt a pragmatic approach to the assessment of customer demands and needs. This can be observed in new key principles regarding the assessment, for example:

1. Where the customer refuses to provide information requested by the insurer for the assessment of customer demands and needs, the insurer should inform the customer of the consequences of not providing such information.
2. Insurers should document the assessment of customer demands and needs in a manner that ensures the retention of information obtained from the customer or other sources and demonstrates that the proposed insurance contract is consistent with the customer’s demands and needs.
3. The method of documenting the assessment of customer demands and needs may be chosen by the insurer, taking into account the specifics of the distribution channel and the form of contact with the customer. The insurer retains the assessment of customer demands and needs documentation in accordance with its own internal policies.
4. In the case of insurance contracts concluded on behalf of a third party, the insurer should obtain from the person seeking insurance protection (i.e. a person that will become a policyholder) information regarding the demands and needs of the future insured persons. For group insurance contracts, the insurer should determine the demands and needs of the group based on information obtained from the person seeking insurance protection (i.e. from a person that will become a policyholder; not necessarily from an insured).

Most notably, the final version removes the most controversial elements of the earlier proposal, including requirements that would have effectively prevented contract conclusion where a customer refused to complete a questionnaire. For renewals and automatic continuations, insurers may rely on previously obtained customer information, provided that the customer is informed and given an opportunity to update the data.

Contract renewals (Recommendation 9)

From the perspective of distribution and especially for contract renewals or proposals for subsequent policy periods, insurers should verify whether any product changes have occurred that affect the scope of coverage and may result in the product no longer meeting the customer’s demands and needs as determined during the assessment of customer demands and needs.

Next steps

The Recommendations will apply on a “comply or explain” basis. Insurers that do not intend to follow specific recommendations should notify the Polish FSA by 15 July 2027 and explain how they intend to achieve the underlying supervisory objectives.

Insurers should assess the impact of the Recommendations on product design, distribution oversight, remuneration policies, and internal governance frameworks, and implement necessary changes before the 1 July 2027 application date.

Although the Recommendations are formally addressed to insurers rather than to intermediaries, it is evident that, in practice, the new obligations will apply equally to insurance intermediaries, including foreign insurance intermediaries, as noted above.