NETHERLANDS - APG subsidiary Loyalis has agreed to compensate 800 clients with investment policies with what campaign groups say were very high costs.

Loyalis' move follows pressure by two lobbying groups - the Stichting Verliespolis and the Stichting Woekerpolis Claim - who have been successfully pursuing large insurance companies, such as Aegon, Delta Lloyd and Nationale-Nederlanden, to reduce insurance company charges for hundreds of thousands of similar cases.

Rather than charging a maximum of 3.5% in policy costs a year, as recommended by the Financial Services Ombudsman, Loyalis said it will now pay compensation based on maximum costs of 2.5% on average.

Guus Creusen, a spokesman for Loyalis, argued the costs charged by the insurer exceeded the 3.5% threshold in only a small number of cases.

He added that his company, which has sold over 77,000 investment policies, would also keep the charges at under 2.5% on any policies sold in the future.

The company has estimated that the total cost for this compensation will be €60,000, and said its decision applies to all categories of insurance-based investment policies, irrespective of contribution volumes or guarantees applied to policies.

Any compensation will be converted into investment units and added to the plan as a one-off payment.

Loyalis is a wholly-owned subsidiary of APG Group but was initially set up and owned by ABP, the Dutch pension fund, to sell insurance and retail investment policies, such as the tax-friendly ‘levensloop' plan, to its members. APG is now a wholly-owned subsidiary of ABP, and Loyalis is part of that agreement.

It was in part the sale of insurance-based products by ABP which led the pension fund to separate its asset management and insurance divisions into a new company, as insurers had argued that the pension fund's practice of marketing such plans to members constituted unfair competition. (See earlier IPE story:  Dutch insurers take regulator to court)