Like any other financial institution, Fortis is involved as a defendant in various claims, disputes and legal proceedings arising in the ordinary course of the Banking and Insurance business.
Fortis makes provisions for such matters when, in the opinion of management, who consult with legal advisors, it is probable that a payment will have to be made by Fortis, and when the amount can be reasonably estimated.
In respect of further claims and legal proceedings against Fortis of which management is aware (and which, according to the principles outlined above, have not been provided for), it is the opinion of management, after due consideration of appropriate professional advice, that such claims are without merit, can be successfully defended or that the outcome of these actions is not expected to result in a significant loss in the Fortis Consolidated Financial Statements.
In the Netherlands, Fortis is involved in two types of disputes:
- Firstly in a number of legal proceedings concerning Groeivermogen products (equity lease products), launched either by individuals or by consumer protection associations against some Fortis operating companies. The claims are based on one or more of the following allegations: violation of the ‘duty of care’, absence of second signature or absence of license to sell the products concerned. The present assessment of the legal risk involved in these proceedings does not give rise to material provisions to be set up within Fortis.
- Secondly complaints have been lodged by individual policyholders and consumer protection associations, alleging lack of transparency as to costs and risks involved in life insurance policies with an investment component (‘beleggingsverzekeringen’) sold by Fortis in the Netherlands. Although Fortis believes that was complied with relevant laws and regulations, it has been decided in line with market wide developments in this respect, to contribute to a solution and therefore Fortis has taken into account in its insurance liabilities, the current estimates of the measures decided.
