NETHERLANDS - Employers' organization VNO-NCW has thrown its weight behind the insurers' opposition to a proposal allowing pension funds to sell income protection schemes as a disability insurance pension.

"Pension funds and life insurers should not get the leeway to offer additional disability insurance, because this is the domain of private insurance companies," the employers' umbrella said in a letter to the parliamentary select committee for Social Affairs.
The so-called ‘WGA hiatus insurance' has been proposed by social affairs' minister Piet Hein Donner's and is aimed at helping partly-disabled workers re-deploy to other roles.

VNO-NCW responded to the minister's proposal to adjust the Pensions Act through an implementing order (AmvB), to define the additional disability insurance - the so-called ‘WGA hiatus insurance' - as a disability pension.

"The proposal is undesirable and contrary to existing agreements on the demarcation of tasks between pension funds and insurers," the employers argued, adding pensions regulator De Nederlandsche Bank has stated insuring WGA risk is an indemnity insurance.

In November, the Dutch Association of Insurers (VvV) raised its voice against minister Donner's plan, arguing it would give pension funds an unfair competitive advantage because pension funds face lesser solvency requirements and also do not pay corporation tax.

According to the VvV, the WGA scheme is in fact an insurance for partial unemployment, which means it is technically neither a pension nor a life insurance product, and can therefore only be delivered by indemnity insurers.

Insurers fear the extension of the pension funds' sphere of activity will cause unfair competition.

Moreover, the VvV is afraid allowing pension funds to sell WGA schemes will lead to WGA schemes being incorporated into pension schemes - implying there is risk of employees facing mandatory insurance charges.

"Workers are already canceling their WGA insurance with insurers, because they have found that they are already insured with their pension fund," said the VvV in a statement.

"This illegal situation will worsen, if pension funds get the formal green light to operate WGA schemes and, as a consequence, integrate them in their mandatory schemes," the insurers explained.

In the opinion of the VvV , the letter of VNO-NCW - which also represents the interests of pension funds - is highly significant because of its principle approach, VvV policy advisor Emile Voorn suggested.

VvV spokesman Hennie Zoontjes estimates the total market share for the WGA schemes is worth between €200m and €300m.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email