MADRID, 30 Jul. (EUROPA PRESS) –
Axa France has reduced 21%, from 670 million pounds (780.9 million euros) to 552 million pounds (643.4 million euros), the amount claimed from Santander in the lawsuit between both companies to settle which is responsible for payment protection insurance (PPI) policies in the UK.
The PPIs are comparable to the case of preferred shares in Spain, since there were also bad practices in the marketing of these products that were intended to cover the risk of non-payment in the event of illness, death or loss of employment, but which in practice It turned out that many people affected were finally unable to avail themselves of this protection due to the clauses included in the contract.
In addition, since 2011 a decision by the British courts obliges banks in the United Kingdom to face potential compensation related to this type of financial product.
In the case between Santander and Axa, it concerns credit protection insurance marketed before 2005 that Axa France acquired from Genworth Financial International Holdings in September 2015 and which were marketed by GE Capital Bank, an entity that was acquired by Santander in 2008 .
In July 2017, Santander Cards UK –as the heir to Ge Capital Bank– and Santander Insurance Services UK informed Axa France that they did not accept responsibility for losses arising from PPI policies taken out before 2005, although the parties signed an agreement whereby Santander UK processed the claims on behalf of Axa France and the latter, in turn, agreed to pay compensation to the policyholders, although without waiving its potential claim against the two Santander companies. In addition, the agreement included a moratorium.
In July 2020, Genworth announced that, under the agreement, it would pay an approximate amount of 624 million pounds sterling (729 million euros at current exchange rates) to Axa.
After the end of the agreement in December 2020, Axa France informed Santander’s subsidiaries of the end of the moratorium and in 2021 filed a legal claim alleging that the bank was obliged to reimburse it 636 million pounds sterling (741.3 million euros) plus interest and any other loss related to the policies.
Santander requested the inadmissibility of the claim in the British court, which upheld a large part of its arguments in July last year and required, instead, Axa France to modify the claims made in its claim.
“As a consequence, on December 2, 2022, Axa France modified the amount of its claim from 636 million pounds sterling (741.3 million euros) to 670 million pounds sterling (780.9 million euros)”, indicates the entity in its financial report.
In January 2023, Santander filed its response to the claim and counterclaim and, in response, Axa France “has withdrawn the claim for the costs paid to Santander under the agreement and, consequently, has reduced the amount of its claim from 670 million pounds sterling (780.9 million euros) to 552 million pounds sterling (643.4 million euros) and has agreed to modify its claims”.
Lastly, the bank points out that on June 29, the insurer submitted the amendment to its statement of allegations, for which reason Santander points out that the provision recorded for this dispute includes the best estimate of liability of its subsidiaries.
However, he affirms that there is still “uncertainty” about the result of this process, so “it is not possible to reliably predict the resolution of the matter or the calendar.”
