The MNB imposed a fine of 12 million forints for unlicensed insurance activities

During the market surveillance investigation, the financial supervision authority established that, with the active and proactive participation of the private individual, QProtection Protect Zrt. had been advertising a “device protection and accident guarantee” service for several electronic devices for a long time on its website and on social media. The company – publicly comparing its product with other insurance offers – offered a “worldwide” device protection service for “devices purchased anywhere” in the event of breakage, damage, internal failure, liquid, water damage, natural damage, or even destruction. The service contract was concluded by several hundred natural and legal persons.

During its activities, QProtection Protect Zrt. assumed insurance coverage and risk, organized a risk community, assessed the risks, calculated and collected the premiums, and also provided service in the event of damage, which are elements of commercial insurance. However, the company did not have the MNB’s permission to carry out the activity.

Following its investigation, the central bank immediately prohibited the company from carrying out any unauthorized financial activity and imposed a market supervision fine of 5 million forints. The supervision imposed a fine of 7 million forints on the contributing private individual. In the case of QProtection Protect Zrt., its cooperative behavior was considered a mitigating circumstance. However, in the case of the private individual, his bad faith was considered an aggravating circumstance, as he was aware, due to his involvement in a previous procedure, that the service performed with his participation required a license.

In its announcement, the MNB highlighted that, before using a service, customers should check, if possible, whether the company or person offering it has the necessary license or registration to perform financial activities and whether it is included in the central bank’s register of market participants. The MNB’s customer service and website will provide all necessary assistance and information to interested parties before concluding their contract.