Decision of 15 May 2019, Provitalia (formerly 2AP) – Reprimand and financial penalty of €20,000
The ACPR supervises the business practices of a market that includes several hundred organisations and over 60,000 intermediaries registered in the register maintained by ORIAS – brokers, general agents, agents – who operate in the sectors of banking and insurance. Few penalties were imposed on intermediaries in 2019-2020. In 2019, of eight published decisions, only one concerned intermediaries. In 2020, of a total of three decisions, only one published decision concerned insurance intermediaries.
The brokerage in this case carried out this distance selling using lists of telephone subscribers who were contacted from a call centre in Tunisia. The marketing process was as follows: the prospect contacted would provide some personal information, in particular about any current insurance policies, and would indicate whether they wished to be called back. If they agreed, a “sales representative-advisor” would call the customer back at a later time. The telephone conversation would conclude with a sale, at which point the customer, having been informed that the policy would incept when their “consent by electronic signature” was obtained, would provide the details of the bank account from which the premiums would be debited. During the last so called “confirmation” call, the customer would be reminded that the contract had already been entered into, but that if they objected or refused at this stage the policy would be cancelled. Finally, the customer received a security code by SMS that, when it was disclosed to the seller, allowed the policy to be finalised. The broker was charged with failing to provide its customers with the pre-contractual information required, in writing or in another durable medium. The broker contended that, by proceeding in this manner, it legitimately came within the scope of the exemption provided for in the French Insurance Code on the grounds that it was the customer who, by agreeing to be called back at the end of the first stage of the sales process, was the instigator of the policy of the subscription (which was then carried out “at their request”).
The ACPR rejected this argument because: “neither the agreement to receive a second phone call, given at the time of the first call, nor the agreement finally given by the consumer, can be regarded as a request to take out a policy using a distance communication telesales process”. It therefore handed down a reprimand and a fine of €20,000 on the broker.
In connection with the sale of an insurance contract, consumers must be provided with a certain amount of information, in writing or on another durable medium, before any commitment is made. However, this requirement to provide prior information in writing may be waived if the contract is entered into at the consumer’s request using a means of remote communication that does not make providing this information possible. The distributor can then simply make the information relating to the policy available to the policyholder “immediately after taking out the policy”. In this context, on 15 May 2019, the Sanctions Commission of the Autorité de Contrôle Prudentiel et de Résolution (ACPR) noted that, in the case of a telephone solicitation, an intermediary is not entitled to benefit from this exemption if it is the intermediary which initiates the originates the telephone conversation that leads to the sale of the insurance contract. In such a case, it must communicate the required pre-contractual information on a durable medium before the conclusion of the contract.
The ACPR’s determination to monitor and penalise this type of practice is confirmed by a new decision issued on 28 February 2020 against a brokerage that was prosecuted for similar acts (use of a platform outside the EU, soliciting prospects, lack of information and advice) and received a reprimand and a two-month ban on marketing insurance contracts, either directly or through a branch in France or abroad or through any person appointed to do so.