48.4 Proceeding conducted by the President of the Office of Competition and Consumer Protection ("OCCP") against PZU

In a decision of 30 December 2011, the President of the Office of Competition and Consumer Protection imposed a fine on PZU of PLN 57 million for the use of practices that limit competition and infringe the prohibition specified in Article 6. 1.3 of the Act on competition and consumer protection following an agreement concluded by PZU and Maximus Broker Sp. z o.o. with its registered office in Toruń (“Maximus Broker”) that limited the competition in the domestic accident group insurance for children, youth and staff of educational institutions by dividing the market between the entities – the customers of PZU in the Kujawsko-Pomorskie region were serviced by Maximus Broker in exchange for recommendation of PZU insurance to those customers. The Office demanded that the practices be discontinued.

The Management Board of PZU refuses to agree with the facts and legal reasons presented in the decision, because the decision does not consider all the evidence and the legal classification was incorrect.

On 18 January 2012, PZU appealed against the decision (thus the decision did not become valid). In the appeal PZU pointed that:

• PZU and Maximus Broker did not conclude any agreement apart from the agreement concerning brokerage fees;
• the President of the Office of Competition and Consumer Protection is wrong in the understanding of insurance contracts concluded via a broker;
• majority of insurance contracts concluded via Maximus Broker was concluded with insurance companies other than PZU;
• PZU and Maximus Broker cannot and could not carry out competitive activities in their markets.

On 22 October 2012, PZU received a response of the President of OCCP to its appeal. On 27 March 2015, the District Court in Warsaw issued a judgment overruling the decision of the President of OCCP of 30 December 2011. On 21 May 2015, the President of OCCP filed an appeal. On 24 June 2015, PZU filed its response to the appeal of the President of OCCP. With the judgment of 6 December 2016, the Appellate Court in Warsaw overruled the decision of the District Court in Warsaw and remanded the matter for a new trial.

PZU recognized a provision for the above fine, whose amount both as at 31 December 2016 and 31 December 2015 was PLN 57 million.