NETHERLANDS - The Dutch Association of Insurers says it has initiated a court case against the large pension funds PGGM and ABP for promoting the levensloop, or life course, products of their subsidiaries to their members.
The association, also known as VvV, accuses both large schemes of unfair competition by ‘illegally’ promoting the levensloop products, which they aren’t allowed to sell themselves.
Recently, the VvV, has also lodged a complaint with the pensions regulator DNB. “Although a decision is said to be expected later this month, we need a quick verdict for clarity. The market for the levensloop products is now on,” explained spokesman Henny Zoontjes.
The case will be brought before the appeal court in Utrecht. A date hasn’t been set, Zoontjes added.
The initiative has surprised both ABP and PGGM. “We have been discussing the issue since November,” they said. PGGM indicated it would invite VvV for a meeting this week.
According to PGGM, the move by VvV is premature due to the pending complaint at the DNB. “If the regulator decides that we must change the communication to our members, we will act accordingly.” ABP said the court case was “unnecessary”.
Meanwhile, two large parties in parliament have tabled a bill aimed at ending the insurers’ monopoly on selling pension products.
Labour party PvdA and liberal party VVD - together they fall seven seats short of a majority - want to open the market for banks. Increased competition will drive down the costs, they claim.
“We don’t mind competition. We are talking about insurance-related products and that is of course our business,” said VvV spokesman Zoontjes. “We don’t believe the banks can offer lower costs.”
The initiative is aimed at tax-friendly deferred annuities. These products have been bought by over half a million people, mostly by self-employed entrepreneurs, and workers trying to plug a pension gap.
According to the VvV, the yearly turnover of deferred annuities at the insurers is €5bn. Approximately €40bn has been invested in these products.