Product Intervention by the Polish Financial Supervision Authority in the Unit-Linked Insurance Sector – Legal Perspective and Impact Assessment

<ns3:p>The decision of the Polish Financial Supervision Authority (KNF) of 15 July 2021 concerning product intervention in the unit-linked insurance market (UFK) was the first measure of its kind in the Polish insurance sector, based on Article 17 of the PRIIPs Regulation. The KNF prohibited the offering of insurance contracts that did not meet minimum profitability requirements (below 50% of the risk-free rate – RFR) or allowed investments in contingent convertible instruments (CoCos). The aim of the decision was to enhance the protection of retail clients. However, the structure of the intervention–particularly the use of uniform criteria without considering product diversity or client profiles–sparked debate regarding its proportionality and effectiveness. The intervention had a significant impact on the market: it led to changes in product design, distribution processes, relations with investment fund companies (TFIs), and internal oversight practices. In 2025, it was supplemented by a regulation issued by the Ministry of Finance introducing additional investment restrictions for UFK products. The objective of this article is to analyze the legal basis and content of the KNF’s decision and to assess its effects from the perspective of regulatory oversight, the insurance market, and consumer protection. The article also aims to evaluate the product intervention in a broader regulatory context and to identify the challenges associated with the application of such supervisory measures.</ns3:p>