VidaCaixa Ordered to Refund Invalid Life Policy Overcharges Since 2005
A court has ordered an insurance company to refund two customers all extra money collected from invalid, unilateral life insurance premium increases since 2005, plus interest and legal costs.
Two customers have won their lawsuit against an insurance company linked to their bank. The court ruled that the one-sided changes made to their life insurance premiums were invalid. It ordered the company to pay back all the extra money it had collected since the first premium increase in 2005, plus interest and legal costs.
The ruling, issued by a lower court earlier this month, examined two life insurance policies. These policies were taken out in 2004 with Aseval, the insurer at the time, and were linked to a mortgage the customers used to buy their home. The policies renewed yearly, covered 75,125 euros, and initially cost 432.72 euros and 333.41 euros per year, respectively.
Over the years, after several company changes that eventually saw VidaCaixa take over the contracts, the premiums kept going up. The court found that by 2019 and 2020, the yearly premiums were far higher than what was first agreed: 2,064.24 euros for the first policy and 2,779.23 euros for the second.
The customers claimed they were never told in advance about these increases. They said the money was taken directly from their bank accounts and that they never clearly or knowingly agreed to the price changes. Before going to court, they tried to resolve the issue outside of court and also contacted the Directorate General of Insurance and Pension Funds (Dgsfp).
In a decision on April 9, 2024, the Dgsfp stated that the premium is a key part of an insurance contract, and any change to it needs both parties to agree. The Dgsfp found no evidence that the insurer had informed the customers about the increases with the proper legal notice. Therefore, it said, the money from increases that weren't properly notified should be paid back.
During the court case, the insurer partially admitted the claim, agreeing to refund the premium increases made after 2015: 3,250.97 euros and 5,545.53 euros, plus interest. However, it argued against refunding earlier amounts. It claimed the policies allowed for premium changes based on age and risk, and also cited the statute of limitations, saying too much time had passed to bring the claim.
The Court found that the contract clause the insurer referred to did not include a specific or set way to review premiums, only general guidelines for pricing. Therefore, the increases were not just part of carrying out the contract, but actual price changes made without the necessary legal consent. Because these changes affected a key part of the contract, the court declared the premium updates invalid from the very beginning. The ruling orders the company to pay back all overcharged amounts since the first increase, plus interest.