Credit institutions offer consumers a wide range of different financial services and products, including insurance products, among others. When applying for a loan, consumers are offered various insurance options: life insurance, property insurance, payment protection insurance (PPI) or credit protection insurance (CPI). Credit protection insurance covers the risk of inability to repay a loan due to the termination of employment, death or temporary or permanent incapacity for work, such as sick leave or disability.

In this regard, it is important to note that consumers contracting a loan negotiate their rights and obligations with the insurer, although the insurance policy is related to the main product of a credit institution – the loan, while the credit institution only acts as the insurance intermediary. 

Although the Croatian National Bank is not competent for the supervision of the operation of insurance companies, credit institutions as intermediaries in the sale of insurance products are expected to provide consumers with transparent and understandable information about the total price of products and any associated potential risks in addition to the description of the insurance products' main features. Prior to the conclusion of a contract, credit institutions are also required to present consumers with all the relevant documentation: insurance conditions, information on the insurance intermediary and on conflicts of interest as well as the insurance product information document (IPID) to allow customers to make an informed decision.

At the same time, consumers should review the available pre-contractual information carefully and on time, based on which they are advised to contract only those products that suit their needs and financial possibilities, regarding which consumers can take into consideration any potential risks to which they may be exposed.

In addition to all of the above and in order to enhance the level of information for consumers about their rights, the Croatian National Bank has requested from all credit institutions, with regard to contracted PPI/CPI policies, to provide consumers with additional information about the rights they may exercise in the case of an early loan repayment. Thus, credit institutions will provide consumers applying for an early loan repayment with written information on the rights arising from the contracted insurance policy negotiated with the loan, such as, for example, the possibility of return of a part of the premium paid.

In the event of undesirable life circumstances because of which consumers may not be able to repay assumed financial obligations on time, the Croatian National Bank also recommends checking whether they have an insurance product contracted with the loan as collateral of the loan user. Consumers are also advised to obtain information from the credit institution with which they have concluded a loan contract or the insurance company with which they have concluded an insurance contract about the manner in which they can exercise their consumer rights.