Hanfa Orders Generali to Immediately Cease Advertising

The Croatian Financial Services Supervisory Agency has ordered Generali Insurance to immediately cease promotional activities regarding ‘up to 23 percent lower price of mandatory car insurance’, as it believes such messages are contrary to the provisions of the Insurance Act, as they lack clear and complete information, i.e., a comprehensive and clear description of the insurance product.

The decision ordering Generali Insurance to immediately cease advertising regarding the promotional information about ‘up to 23 percent lower price of mandatory car insurance’ was made by the Management Board of Hanfa at today’s meeting, and Generali was also instructed to submit a report to Hanfa within three days of receiving the decision, detailing the removal of illegalities and irregularities, along with a list of media where the mentioned promotional information was published and evidence of compliance with the order.

In its explanation, Hanfa states that through indirect supervision, it was determined that Generali had published the aforementioned promotional messages in advertisements on its website, in some daily newspapers, and on HRT’s program.

Hanfa assessed in the minutes that the claim that Generali “…up to 23 percent lower price of mandatory car insurance!” ambiguously and incompletely directs the promotional information to potential policyholders, without a comprehensive and clear description of the insurance product, especially since it is unclear to which reference price the possible percentage reduction refers and to which vehicles it applies, in terms of the provisions of the Insurance Act.

In its response to Hanfa’s minutes, Generali stated that until September 14, 2013, all insurance companies for automobile liability insurance officially used the same price list, the same bonus-malus system, and offered the same price for mandatory car insurance for the same vehicle characteristics.

Therefore, as stated in the explanation, it claims that its assertion that with the new price list it offers ‘…up to 23 percent lower price of mandatory car insurance…’ is clear, as it refers to a lower price compared to the previous policy contracted by the policyholder, regardless of which insurance company the policy was contracted with.

Generali also claims that from the very name of the product, mandatory ‘auto’ insurance, which it considers to be established and accepted, it is clear which vehicles it refers to, and that if there is a proposal for clearer definition, it is willing to add the proposed clarification.

Hanfa does not accept Generali’s stance and refers to the provisions of the Law on Mandatory Traffic Insurance, which states that vehicles subject to mandatory automobile liability insurance include not only personal vehicles but also motorcycles, tractors, trucks, buses, etc.

However, from Generali’s advertising, it is not clear which specific vehicles the mentioned price reduction refers to, which may be confusing for potential policyholders, Hanfa explains.

The agency also does not accept Generali’s position that its assertion that it offers ‘up to 23 percent lower price of automobile liability insurance’ is clear, as there is no mention that it refers to a lower price compared to the previous policy, regardless of which insurance company the policy was contracted with.

Such advertising still does not clarify which reference price the possible percentage reduction refers to, Hanfa emphasizes.

They also note that Generali can publish promotional information, but in a manner that complies with the provisions of the Insurance Act relating to the promotional activities of insurance companies.

The mentioned promotional information is contrary to the provisions of the Insurance Act, according to which promotional information must contain clear and complete information, i.e., must provide a comprehensive and clear description of the insurance product, Hanfa assesses.