KNF recommendations on insurance distribution: Key information
On 26 June 2026 the Polish Financial Supervision Authority (KNF) issued its Recommendations for Insurance Undertakings on Insurance Distribution. The document is a major step in the process of clarifying the rules for distribution of insurance products on the Polish market and sets new standards which insurers will need to comply with.
The June 2026 recommendations (KNF Resolution no. 190/2026) replace the Guidelines for Insurance Undertakings on Insurance Distribution of 24 June 2014.
Legal basis and nature of KNF recommendations
The June 2026 recommendations were issued under Art. 365(1)(2)(a)–(c) of the Insurance and Reinsurance Act of 11 September 2015, which authorises the regulator to issue recommendations directed to insurance undertakings, for purposes including ensuring that their operations comply with the law and combatting infringement of the interests of policyholders, insureds and beneficiaries.
KNF recommendations do not constitute a source of universally binding law, because the Polish Financial Supervision Authority does not have legislative powers. They are in the nature of “soft law,” i.e. non-authoritative, non-normative administrative acts. Their primary function is to set market standards and to indicate what the regulator regards as the proper interpretation of the binding regulations.
Although failure to comply with the recommendations does not in itself constitute grounds for imposing sanctions, the wording of the recommendations reflects KNF’s oversight approach. But in practice, failure to implement the recommendations may trigger oversight actions, leading to a finding of infringement of the regulations, and, in turn, imposition of sanctions against the insurance undertaking. The recommendations thus serve mainly a communication function, indicating to market players the manner of applying the regulations expected by the regulator.
Under Art. 365(5) of the Insurance and Reinsurance Act, KNF recommendations are issued in line with the principle of “comply or explain.” This means that insurers that don’t follow the recommendations or don’t plan to implement them should instead present the manner in which they intend to achieve the aims set by KNF.
Deadline for implementing the June 2026 recommendations
Insurers should apply the recommendations issued in June 2026 by 1 July 2027 at the latest, except for recommendation 7.9 concerning the savings portion of an insurance product, which should be applied at the latest by 1 July 2028.
If an insurance undertaking does not intend to comply with the manner of operation indicated in the June 2026 recommendations, then, in line with the “comply or explain” principle, it should inform the KNF Office by 15 July 2027 at the latest of the manner in which it intends to achieve the aims for which the recommendations were issued. The information received from insurers will then be disclosed on the regulator’s website.
Purpose of the June 2026 recommendations
As stated in the justification for the document, the recommendations are intended in particular to:
- Ensure uniform and consistent compliance with the law by insurance undertakings
- Eliminate identified irregularities in insurance distribution, whether conducted directly or through insurance intermediaries or undertakings referred to in Art. 2 of the Insurance Distribution Act of 15 December 2017 (i.e. distributors of certain add-on coverage for products, lost baggage, trip cancellation etc)
- Combat the offering of insurance products that do not meet customers’ demands and needs
- Combat the offering of insurance products that do not provide customers with appropriate value.
Addressees of the recommendations
The recommendations are directed to:
- Polish insurance undertakings
- The main branches of foreign insurance undertakings, taking into account the specifics of their organisation, related to the statutorily defined functioning within the structure of the main branch of the positions of director and deputy director of the main branch
- Foreign insurance undertakings with their registered office in other member states of the European Union or member states the European Free Trade Association which are parties to the Agreement on the European Economic Area, conducting insurance activity in the territory of the Republic of Poland under the rules set forth in the Insurance and Reinsurance Act, pursuant to the freedom of establishment (via a branch) or the freedom to provide services—and, with respect to recommendations 4 through 28, under the principle of the general good.
Moreover, recommendations 11–23 will apply as relevant to cooperation by insurance undertakings with entities entered in the register of intermediaries in another EU member state, conducting agency or brokerage activity in Poland via a branch or, under the freedom to provide services, in a manner other than via a branch.
Subject matter of the June 2026 recommendations
The recommendations cover a broad range of insurance distribution issues, particularly involving:
- Duties of the insurance undertaking’s management board and supervisory board
- Organisation of the insurance undertaking’s distribution activities
- The construction of insurance products in the context of their value for the customer
- Evaluation of customers’ demands and needs, as well as other information obligations in the distribution process performed by personnel conducting the insurance undertaking’s distribution activities
- The insurance undertaking’s cooperation with agents, brokers, and undertakings referred to in Art. 2 of the Insurance Distribution Act
- Group insurance contracts
- Conflicts of interest
- Internal control systems, the internal audit function, and the compliance function.
The latest set of KNF guidelines contains 30 main recommendations, which are clarified through further detailed recommendations. The principal recommendations are as follows:
| PRINCIPAL RECOMMENDATIONS | |
| Insurance undertaking’s management board and supervisory board | |
| Recommendation 1 (+ 3 detailed recommendations) | The management board of the insurance undertaking shall ensure the development, implementation, regular review and updating of rules for insurance distribution, covering the totality of insurance distribution issues, and shall also ensure proper execution of the rules. |
| Recommendation 2 (+ 3 detailed recommendations) | The management board of the insurance undertaking shall periodically conduct an assessment of the execution of the insurance distribution rules, and notify the supervisory board of the results of the assessment. |
| Recommendation 3 (+ 2 detailed recommendations) | The supervisory board of the insurance undertaking shall oversee the execution of the insurance distribution rules. |
| Organisation of insurance distribution activities | |
| Recommendation 4 (+ 4 detailed recommendations) | The insurance undertaking shall ensure that its distribution activities are performed solely by distribution personnel meeting the conditions set forth in the Insurance Distribution Act, and that distribution personnel are knowledgeable about the insurance product and the target market for the product. |
| Recommendation 5 (+ 2 detailed recommendations) | The insurance undertaking shall have internal policies and solutions in place for overseeing distribution personnel in their performance of the insurance undertaking’s distribution activities. |
| Recommendation 6 (+ 2 detailed recommendations) | The insurance undertaking shall ensure that the manner of compensating distribution personnel is consistent with the duty to act in the best interests of customers. |
| Construction of insurance products | |
| Recommendation 7 (+ 16 detailed recommendations) | The insurance undertaking shall ensure that it distributes products with appropriate value for the customer. |
| Insurers’ obligations to customers involving insurance distribution by their own staff | |
| Recommendation 8 (+ 11 detailed recommendations) | The insurance undertaking shall ensure the proper conduct, form, and documentation of the customer demands and needs analysis. |
| Recommendation 9 (+ 3 detailed recommendations) | The insurance undertaking shall have solutions in place ensuring that the proposed insurance contracts meet the customer’s demands and needs for insurance protection. |
| Recommendation 10 (+ 3 detailed recommendations) | In performing its informational obligations, the insurance undertaking shall enable customers to familiarise themselves with information and documents. |
| Insurers’ cooperation with agents | |
| Recommendation 11 (+ 3 detailed recommendations) | The insurance undertaking’s oversight of agents shall include effective verification that they meet the conditions for performing agency activity. |
| Recommendation 12 (+ 4 detailed recommendations) | The insurance undertaking shall have internal policies and solutions in place to ensure the accuracy of data entered at its request in the register of agents. |
| Recommendation 13 (+ 2 detailed recommendations) | The insurance undertaking shall provide support to agents in ensuring that the agency activities they perform comply with the legal regulations and the best interests of customers. |
| Recommendation 14 (+ 3 detailed recommendations) | The insurance undertaking shall oversee the quality of informational materials directed by agents to customers, including advertising and marketing materials, used by agents in connection with performance of agency activities for or on behalf of the undertaking. |
| Recommendation 15 (+ 2 detailed recommendations) | The insurance undertaking shall ensure that the manner of compensating agents by the undertaking is consistent with the agents’ duty to act in the best interests of customers. |
| Recommendation 16 (+ 3 detailed recommendations) | The insurance undertaking shall support agents in meeting their training obligation, in the case of persons required to undergo training, and shall oversee execution of this obligation. |
| Recommendation 17 (+ 3 detailed recommendations) | The insurance undertaking shall oversee compliance by cooperating agents with the obligation to hold civil liability insurance or an insurance guarantee, as required by the Insurance Distribution Act. |
| Recommendation 18 (+ 3 detailed recommendations) | If the insurance undertaking entrusts the distribution of insurance to a group of agents, including agents operating in a consortium, it shall take measures to ensure that their activities comply with legal regulations and the best interests of customers. |
| Recommendation 19 (+ 2 detailed recommendations) | If irregularities are found in the agent’s activities due to the agent’s lack of proper supervision of a natural person conducting agency activities, the insurance undertaking shall take action. |
| Recommendation 20 (+ 6 detailed recommendations) | The insurance undertaking shall exercise effective oversight of agents. |
| Insurers’ cooperation with brokers | |
| Recommendation 21 (+ 2 detailed recommendations) | The insurance undertaking shall cooperate with brokers on the basis of clear rules. |
| Recommendation 22 (+ 2 detailed recommendations) | The rules for compensating brokers adopted by the insurance undertaking shall reflect the specific nature of brokerage activity. |
| Recommendation 23 (+ 2 detailed recommendations) | The insurance undertaking shall document its cooperation with brokers. |
| Insurers’ cooperation with undertakings referred to in Art. 2 of the Insurance Distribution Act | |
| Recommendation 24 (+ 5 detailed recommendations) | In cooperating with undertakings referred to in Art. 2 of the Insurance Distribution Act, the insurance undertaking shall take steps to ensure that they properly perform their obligations to customers. |
| Recommendation 25 (+ 2 detailed recommendations) | The insurance undertaking shall ensure that in carrying out their informational obligations, the undertakings referred to in Art. 2 of the Insurance Distribution Act enable customers to familiarise themselves with information and documents. |
| Recommendation 26 (+ 2 detailed recommendations) | The insurance undertaking shall ensure that the manner of compensating undertakings referred to in Art. 2 of the Insurance Distribution Act is consistent with the duty to act in the best interests of customers. |
| Group insurance contracts | |
| Recommendation 27 (+ 4 detailed recommendations) | In the case of group insurance contracts, the insurance undertaking shall take steps to ensure that information is passed on concerning insurance coverage or denial of coverage, as well as the terms of the insurance. |
| Conflicts of interest | |
| Recommendation 28 (+ 5 detailed recommendations) | The insurance undertaking shall identify and manage conflicts of interest. |
| Internal control system, internal audit function and compliance function | |
| Recommendation 29 (+ 9 detailed recommendations) | Insurance distribution shall be the subject of assessments conducted within the internal control system, including by the insurance undertaking’s internal audit function and compliance function. |
| Recommendation 30 (+ 3 detailed recommendations) | The insurance undertaking shall monitor petitions and complaints. |
Summary
The KNF recommendations from June 2026 will greatly contribute to maintaining order on the insurance market in Poland. Although the recommendations do not constitute a source of universally binding law, in practice they set the standards expected by the regulator in the area of insurance distribution, and will impact the organisation of sales processes at insurance undertakings and their cooperation with intermediaries. Implementation of the recommendations should help consolidate market practices, increase transparency, and strengthen the protection of customers. They may also drive major organisational and product changes on the part of insurers, particularly in the area of designing insurance products and assessing their value for customers.
Mateusz Kosiorowski, adwokat, Anna Szczęsna, Insurance practice, Wardyński & Partners
