We first spoke with Pawel Stykowski, the Head of Legal at InterRisk in Poland, two years ago, in the December 2014 issue of the CEE Legal Matters. We decided to follow up with him now to see how his role and expectations have changed in that time.
CEELM: When we last spoke you had recently returned to the in-house world after three years in private practice. How do you feel about the role now, two years down the road?
P.S.: Time has shown that joining InterRisk was the right decision. Although my duties have expanded significantly – they now include a compliance function, supervision over court proceedings, and filing subrogation claims – I can say that I’m glad that I work for InterRisk. This is mostly because my team is doing a great job. Working with such talented and reliable people is a real pleasure. Also, I feel that the company is fairly flexible: whenever we can show that a change would make the company more efficient, the change is introduced almost instantly, without much paperwork. This is possible only thanks to the creative attitude of the management board and proactive approach of the heads of other departments – especially the Claims Handling Department, with which we work all the time.
On the plus side, as an in-house lawyer I participate in activities of the Polish Insurance Association (PIU). In 2015 I joined PIU’s Legal and Legislative Team. Despite leaving a law firm, I still have the opportunity to publish articles in insurance journals. When I joined InterRisk, I wasn’t entirely sure that this would be possible.
I think the best thing about being an in-house lawyer is that I don’t have to be on-call all the time. I was hoping that I wouldn’t have to check my e-mails after I leave the office, and that is exactly the case, although I must admit that my current work is much more intense than in a law firm – every day I answer dozens of e-mails, several phone calls, and participate in meetings, and from time to time I also go to court. When I’m at the office there is absolutely no spare time. In a law firm, there are weeks when you work up to 100 hours per week (extreme cases, but it happens), but there are also weeks when there is not much to do. An in-house lawyer has plenty of work all the time – I think every one of us has a very long to-do list, which just doesn’t get any shorter, no matter how hard you try.
CEELM: What was the biggest project you worked on since 2014? What were your main takeaways?
P.S.: The implementation of the 2015 Act on Insurance and Reinsurance Activity. We had to review and update every set of general terms and conditions of insurance. It was a great opportunity to eliminate all the clauses which, for various reasons, might have been faulty or simply ambiguous. Moreover, we had to introduce internal rules and procedures ensuring that sales of insurance policies and claims handling are conducted in compliance with the new Act. The best thing about this project was that we managed to perform all these tedious tasks on time. The truth is that such tasks are in practice the most difficult ones. That is why there are so few insurance lawyers.
CEELM: The insurance business has seen quite a few interesting turns in Poland in recent years. What were the biggest challenges for you?
P.S.: The hardest part is implementing rules from three different sources – the EU, the Polish Parliament, and the Polish Financial Supervision Authority. Frequently, the rules regulate the same part of an insurance company’s activity in slightly different ways. For example, there are so many provisions and guidelines on handling complaints that when we drafted internal regulations we had a hard time reconciling them with one another. On January 10, 2017, new provisions concerning ADR will come into force, which will further complicate notices on the complaint-filing system that we have to provide to our customers.
CEELM: What are the main opportunities and threats you see on the horizon for the sector?
P.S.: Threats are easier to spot. First, “claims offices” (“kancelarie odszkodowawcze”) that clearly admit that they are going to generate new types of claims. Generate – that is the word used by the president of the union organization of claim offices. They come up with claims not previously known to Polish law and from time to time are successful in convincing courts that such claims are legitimate. Due to this, insurance companies have to pay for claims that they could not predict when the insurance contract was executed.
Second, the government may take legal steps in response to the unit-link insurance products crisis
As background, a few years back the Court of Appeal in Warsaw ruled that a contractual clause providing for a surrender charge amounting up to 100% of the policy value (in the first two years of a contract) is an unfair term – an abusive clause – in a consumer contract, and are not binding on consumers. This started an avalanche of litigation, which is far from over. A few class actions have been filed, but none of these cases has ended yet. As far as individual cases are concerned – insurers are still wining some of those. The Office for Competition and Consumer Protection is about to conclude a settlement with insurers that offer unit-linked life insurance with fair surrender charges. This matter has been widely discussed in the media.
The Minister of Justice has established a committee that will analyze why such products were mis-sold in the first place and how to avoid such problems in the future. The public is also concerned about the rising price of third-party liability motor insurance. The increase in prices is justified, as these products were not profitable for years and the aforementioned actions of claims offices make them even less profitable, but people are surprised and are asking the government to take action.
Third, more legal acts are to be implemented. Now it’s the turn for key EU legislation – the Insurance Distribution Directive and the General Data Protection Regulation. The latter will be a particular challenge.
CEELM: Two years ago you shared the following with us: “I feel that I’m creating a great team which will help to improve the whole company. I feel that by solving the legal problems of other teams I have a part in building InterRisk’s image and market share. And I hope that the solutions that I have already implemented and will implement in the next few years will permanently improve the company. It is a great feeling.” How has your team developed, and what solutions have you implemented since then that you are most proud of?
P.S.: An in-house legal team is a living body. Our team has grown significantly due to the expansion of the scope of the Legal Department’s duties. Now it is nine lawyers, divided into two teams – legal advice and court proceedings. I must say that the lawyers I recruited when I started working here have proved to be valuable reinforcements. The procedures introduced back then are still in force, and they turned out to be very efficient. Every request is sent directly to me; I decide who will do it (and provide him/her with directions on how to proceed), and he/she copies me on every e-mail concerning this issue. That way I always know what is required of the Legal Department, can share my know-how with the others, and ensure that e-mails and documents drafted by my team are of good quality (both in the legal and business sense). Although I must admit that in the court-proceedings team there is still room for improvement.
This Article was originally published in Issue 3.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.