Polish FSA publishes revised draft recommendations on insurance distribution
The Polish Financial Supervision Authority (the “Polish FSA”) has published a revised draft of its recommendations for insurance undertakings on insurance distribution (the “Draft Recommendations”). The new version substantially modifies the proposal consulted in 2025 and reflects feedback from market participants.
The Draft Recommendations are intended to replace the Polish FSA’s 2014 distribution guidelines and to align supervisory expectations with the current framework under the Act on Insurance Distribution and Solvency II.
Comments on the Draft Recommendations may be submitted to the Polish FSA by 31 March 2026. The Polish FSA expects the final recommendations to apply from 1 January 2027, with a later application date of 1 July 2028 for certain investment‑related elements.
Product value and minimum claims ratio
Product value remains a central theme of the Draft Recommendations.
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 bancassurance and CPI products (under Recommendation U), is now extended across distribution channels and product types. At the same time, the Draft Recommendations provide for important exclusions, including products subject to existing product intervention measures, large risks insurance, insurance guarantees and selected pension products on the Polish market.
For life insurance products with a savings component, the Draft Recommendations introduce a separate cost‑impact test, with a maximum annual impact of 2.65%.
Remuneration and incentives
Insurers are expected to maintain internal policies governing remuneration of employees, agents and other distributors, including optional variable remuneration and incentive schemes. However, the Draft Recommendations no longer impose rigid remuneration models or mandatory incentive structures. Instead, 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 (such as complaints, cancellations or customer satisfaction) is expressly recognized as an appropriate element of remuneration frameworks.
Cooperation with agents
While insurers are still expected to exercise effective oversight of agents, the Draft Recommendations emphasize:
- monitoring compliance with legal and registration requirements;
- providing agents with guidance, instructions and substantive support; and
- taking corrective measures before sanctioning where necessary.
Proposals concerning detailed verification of legal relationships between agents and sub‑agents have been removed compared to 2025 version of the recommendation. The revised approach places greater reliance on supervisory judgement and proportionality.
Assessment of customer demands and needs
The Draft Recommendations adopt a more pragmatic than the previous version approach to the assessment of customer demands and needs.
Most notably, the revised draft 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.
These changes significantly reduce operational risk and better reflect market practice.
Brokers and distribution models
The Draft Recommendations no longer prohibit additional or performance‑based remuneration for brokers. Instead, the Polish FSA focuses on safeguarding broker independence and preventing conflicts of interest or misselling.
This represents a clear step back from regulatory interference in contractual arrangements between insurers and brokers.
Next steps
The Draft Recommendations will apply on a “comply or explain” basis. Insurers that do not intend to follow specific recommendations will be required to notify the Polish FSA and explain how they intend to achieve the underlying supervisory objectives.
Although the formal application date is expected to be 1 January 2027, entities to which the Draft Recommendations are addressed and are within the scope should already assess their potential impact on product design, distribution oversight, remuneration policies and internal governance frameworks. Entities in scope of the Draft Recommendations include:
- domestic insurance companies,
- main branches of foreign insurance companies,
- foreign insurance companies headquartered in member states of the European Union conducting insurance activities within the territory of the Republic of Poland.
The Warsaw CMS Financial Services Regulatory Team (Łukasz Szymański, Kacper Kasprzak) is engaged in preparing the consultation position for the Polish Leasing Association that represents the Polish leasing industry.
