PZU Group’s policies [Accounting Act]
Financial crime, money laundering and financing terrorism are challenges that evince serious consequences for the financial markets across the globe. For many years the PZU Group has been taking legally required actions to prevent situations in which its transactions are used for unlawful purposes.
Employees and associates, including PZU Życie agents undergo regular training on preventing money laundering and financing terrorism.
The Act of 1 March 2018 on Combating Money Laundering and Financing of Terrorism (Journal of Laws of 2018, item 723) referred to as the AML (Anti-Money Laundering) Act imposed new duties on PZU. One of the basic obligations following from the new Act is the multidimensional assessment of the money laundering and financing of terrorism risk in PZU Życie, taking into account internal and external factors, including clients, countries or geographical areas, products, services, transactions, supply channels, business partners and Group entities. Legally required internal procedures were implemented, including a group procedure addressed to all obligated institutions in the PZU Group (institutions belonging to the Group and subject to the AML Act) and the relevant internal procedures were updated. PZU is not subject to the regulations of the AML Act, but as the parent company in the PZU Group, it adopts a group procedure for the Group entities which are obligated institutions. The group procedure defines the standards prevailing in the PZU Group and the rules for exchange and protection of information for the needs of performance of AML activities.
To submit to these regulations PZU launched the AML project. Its purpose is to devise solutions to facilitate the implementation of the Act on business processes and operational processes while taking into account the requirements ensuing from the bill to amend the act on counteracting money laundering and financing terrorism (to implement the requirements of the Fifth AML Directive and future AML requirements defined under the Sixth AML Directive).
The PZU Group has special security procedures in the crime prevention area. PZU and PZU Życie have implemented the „Security procedure for counteracting money laundering and terrorism financing in PZU Życie”. It is applicable to Management Board Members, company employees and sellers as well as external entities that collaborate with companies on the basis of concluded agreements.
According to this document, the security standards in the area of counteracting money laundering and terrorism financing are as follows:
The “Procedure” consists of the following:
PZU and PZU Życie analyze the insurance contracts they conclude and the transactions they execute or transactions unrelated to business dealings to do a risk assessment of money laundering and financing terrorism. Companies apply financial security measures to their clients. They conduct a risk assessment of money laundering and financing terrorism related to the establishment of business relations or a transaction unrelated to business dealings.
The “Security procedure for counteracting money laundering and terrorism financing in PZU Życie SA” contains guidelines concerning actions to be taken in the case of suspicious transactions and if a client is listed on sanction lists (they form attachment 5 to the “Procedure”).
Actions performed as part of the “Procedure” and the AML act:
This document describes not just the roles and tasks of persons involved in the AML process but also their responsibility. The Management Board Member overseeing the Security Department is responsible for implementing the obligations for counteracting money laundering and terrorism financing prescribed by the AML Act. In accordance with the “Security Policy” of 2015 the PZU Management Board designated the Management Board Member responsible for security in PZU Życie to exercise this oversight.
PZU Życie’s declaration:
Risk awareness is a crucial part of the company’s security system functioning correctly; that is why all employees and intermediaries should be trained and have up-to-date knowledge of the applicable internal regulations and other necessary internal rules on counteracting money laundering and terrorism financing. The head of the organizational cell or unit in which the employee is employed is responsible for overseeing training. The head of the organizational cell or unit of the Head Office supervising a given structure is responsible for supervising the employees of local structures of divisions and tied intermediaries.
Detailed information on prevention and prophylactic security measures is set forth in the “Instructions regarding prevention and prophylactic security measures in PZU and PZU Życie”. It spans actions to raise the awareness of security risks in the following areas:
In TUW PZUW the “Procedure for fighting crime in TUW Polski Zakład Ubezpieczeń Wzajemnych” formalizes the process of identification, management and protection of the company against crime, in particular insurance crime and fraud.
TFI PZU has implemented “Rules and Regulations for Counteracting and Disclosing Manipulations in Financial Instruments in the Activity of Towarzystwo Funduszy Inwestycyjnych PZU”. The “Procedure for Counteracting Money Laundering and Terrorism Financing” is also in force there. It is used in the company’s internal relations and in external relations to which the company is a party. The “Code of Best Practices of Institutional Investors” prepared and approved by the Chamber of Fund and Asset Management is also in force in the company. This code provides the company with a great deal of support in defining the rules, moral and ethical standards and due diligence levels in TFI PZU’s relationships with other institutional investors, its clients and issuers of financial instruments. TFI PZU’s adoption of this code also attests to the application of best investment practices in the company.
PZU Finanse, an obligated entity under the AML act has a procedure for anonymously reporting breaches of the regulations related to counteracting money laundering and terrorism financing
In 2020 there were 276 incidents in the PZU Group related to insurance fraud (187 in PZU, 13 in PZU Życie, 24 in LINK4, 1 in TUW PZUW and 51 in its international companies). These cases were handed over to the law enforcement authorities.
The Alior Bank Group has implemented a procedure for preventing money laundering and financing of terrorism.
In 2020, there were 826 pending fraud cases in the Alior Bank Group. Irregularities involving internal fraud were identified in 65 instances. The level of losses was PLN 236 thousand, of which PLN 176.4 thousand was recovered.
In Bank Pekao and five other companies in its group, internal fraud management procedures were implemented.
Bank Pekao has in place a Fraud Management Process regulation which introduces the Official Instructions entitled Fraud Management Process in Bank Polska Kasa Opieki. The regulations define specifically the “Fraud Management Policy” introduced by the bank’s Management Board. The Official Instructions define the following:
In addition, there are defined obligations and powers of the Financial Security Office in the bank’s Security Department, which performs the tasks associated with central coordination of prevention of financial crime in the bank.
The Fraud Management Process and the enacted Official Instructions impose on each bank employee the obligations and powers associated with prevention of financial crime to the detriment of the organization itself and the bank’s clients.
In 2020 the amount of fraudulent operations totaled PLN 30,948,428.69 (2,437 fraudulent operations) – such a high amount stems from registering the attempts at cashing high value checks through Bank Pekao (four checks for an amount exceeding PLN 24 million).
“PZU and PZU Życie SA have implemented the Sanction Policy which lays down the standards for managing sanction risk for the purpose of adhering to the requirements under international sanctions in the business conducted by PZU and PZU Życie SA”.
On 9 January 2020 the Polish Financial Supervision Authority imposed a financial penalty on PZU in the amount of PLN 370 thousand:
In 2020 five proceedings were pending against the Group and its subsidiaries in terms of violating fair competition principles (PZU, PZU Estonia, Bank Pekao, Alior Bank). One proceeding concerning PZU came to an end. In June 2020 the Supreme Court dismissed the cassation appeal lodged by the President of the Office of Competition and Consumer Protection, whereby it ultimately released PZU of the allegation of an illegal division of the market with Maximus Broker and the sanction of PLN 56.6 million. PZU was accused of allegedly concluding an illegal sales agreement with Toruń’s insurance intermediary Maximus Broker, involving division of the market of group accident insurance for education centers in the Kujawsko-Pomorskie Voivodship. This case had been pending since December 2011.