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AFM imposes a penalty on Krediethuis B.V. for inappropriate advice on investment-linked insurance and life insurance

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The Netherlands Authority for the Financial Markets has imposed an administrative penalty of €6,000 on Krediethuis B.V. (Krediethuis) on 8 July 2010, for unsuitable advice in relation to investment-linked insurance and credit protection (life insurance). It is not clear that entering into these insurance policies has been in the interests of consumers.

The AFM reviewed a total of ten cases from the period of 1 January 2009 to 3 June 2009. In the ten cases reviewed, Krediethuis failed to obtain adequate information regarding the financial position, objectives and risk acceptance of the consumers concerned. Krediethuis was therefore not able to give advice on the basis of information obtained. Moreover, in four cases Krediethuis failed to take account of the information it had obtained.

In the assessment of the AFM, Krediethuis thus acted in breach of Article 4:23, paragraph 1, sections a and b of the Dutch Financial Supervision Act. Under the Wft, financial enterprises are obliged to give consumers appropriate advice. Krediethuis therefore is obliged to obtain information regarding the consumer and take account of this when giving advice.

Interested parties can submit the AFM's decision to the competent court for review. If you have any questions or comments you can contact the Financial Markets Information Line on: 0900-5400 540 (€0.05 per minute).

The AFM promotes fairness and transparency within financial markets. We are the independent supervisory authority for the savings, lending, investment and insurance markets. The AFM promotes the conscientious provision of financial services to consumers and supervises the honest and efficient operation of the capital markets. Our aim is to improve consumers’ and the business sector’s confidence in the financial markets, both in the Netherlands and abroad. In performing this task the AFM contributes to the prosperity and economic reputation of the Netherlands.

The AFM is committed to promoting fair and transparent financial markets.

As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands.

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