When you face an entry in the incident register, it is crucial that the proportionality test for a CIS registration is carried out carefully and correctly by the relevant financial institution. A registration with the CIS Foundation (Centraal Informatie Systeem) can have far-reaching consequences for your financial and social life. It is not permitted for an insurer or bank to register you just like that and without thorough investigation. They must adhere to the strict rules laid down in the Protocol Incident Warning System for Financial Institutions (PIFI). One of the most important safeguards within this protocol is the requirement that the measure must be proportionate to the committed act.
In practice, however, we regularly see that insurers omit this weighing or provide insufficient motivation. In this comprehensive article, we explain to you in detail what your rights are, how this testing should take place, and what steps you can take if you believe your registration is unjustified or disproportionate.
What exactly does the proportionality test for a CIS registration entail?
The proportionality test for a CIS registration is a fundamental legal principle that dictates that the severity of a sanction – in this case the registration in the incident register – must be in reasonable proportion to the seriousness of the conduct you are accused of. In concrete terms, this means that an insurer or bank may not automatically proceed to a maximum registration of eight years for any given irregularity. A careful weighing of all relevant facts and circumstances of the specific case must be made. Various factors play a role here, such as the nature of the violation, the amount of any financial disadvantage for the insurer, your personal circumstances, and the impact the registration will have on your daily life. If an insurer does not make this weighing or makes it insufficiently, the registration is contrary to the applicable regulations and can be successfully challenged.
It is very important to understand that the burden of proof for demonstrating proportionality lies entirely with the financial institution. They must be able to justify why a lighter measure, such as merely a warning or cancelling the policy without external registration, was not sufficient in your specific situation. More information about the general operation of these registers can be found in our article on CIS registration: what is it and how do you remove it?.
The strict requirements of the Protocol Incident Warning System for Financial Institutions (PIFI)
The Protocol Incident Warning System for Financial Institutions, PIFI for short, forms the legal framework within which financial institutions may process personal data in the context of fraud prevention and security. Article 5.2.1 of this protocol explicitly states that the principle of proportionality must be observed when deciding to include a person in the External Referral Register (EVR). This requires an assessment tailored to the individual. The insurer must motivate why the interests of the joint financial institutions outweigh your personal interest in not being registered. It is not sufficient that there is an ‘incident’ or a suspicion of fraud; the measure must be necessary and appropriate. Moreover, the General Data Protection Regulation (GDPR) requires that the processing of personal data is lawful, fair, and transparent. A registration that cannot pass the proportionality test is by definition unlawful. Insurers tend to follow standard procedures, which compromises the individual assessment. This is contrary to the spirit and the letter of the PIFI. It is therefore essential that your file is critically assessed by an expert who is familiar with this complex matter and who can hold the insurer accountable for not complying with these strict requirements.
Why the proportionality test is often not or insufficiently applied
In the daily practice of our law firm, we notice that the proportionality test is often reduced to a formality by insurers, or even skipped entirely. This has several causes. First, many insurers use automated systems and standardized decision trees to detect and punish fraud. As a result, there is little to no room for the human dimension and the necessary individual assessment. Second, there is a certain tunnel vision in fraud departments; once an irregularity is found, the primary reaction is often to impose the heaviest possible sanction as a deterrent. This leads to situations where a relatively minor mistake when filling out an application form is punished with an EVR registration of eight years. Such decisions lack any form of nuance and do not take into account the far-reaching consequences for the person involved. An insurer must realize that a registration is an ultimum remedium, a last resort that may only be used if other, less drastic measures are not effective. The lack of a proper proportionality assessment is one of the most common and most successful grounds for legally challenging a registration. For a clear insight into the differences between the various registers, you can read our article on EVR registration: difference with CIS explained.
The far-reaching consequences of an unjustified entry in the incident register
The impact of a registration in the External Referral Register (EVR) of the CIS Foundation can hardly be overestimated. In practice, it functions as a financial and social boycott. When you are registered, all affiliated banks and insurers in the Netherlands share this information. This means that it is virtually impossible for you to take out a regular insurance policy. Your current insurance policies can be unilaterally terminated (cancelled), and taking out a new policy for your car, home, or household contents, for example, will be refused. If you are still able to take out insurance, this is often only possible with the equalization company De Vereende, at exorbitant premiums and very strict conditions.
In addition, a registration can cause major obstacles when applying for a mortgage or a loan. Banks will consider you an unacceptable risk. The consequences can also be disastrous in the business sphere, for example if you need a business account for your company or if you practice a profession that requires a Certificate of Good Conduct (VOG) or an integrity test. Given these draconian consequences, it is evident that an insurer must not treat the decision to register lightly. The proportionality test serves as the crucial buffer to protect citizens against arbitrariness and disproportionate punishment by powerful financial institutions.
How case law and the Kifid rule on the proportionality test
Both the regular courts and the Financial Services Complaints Institute (Kifid) maintain a very strict line when it comes to testing CIS and EVR registrations. Established case law shows that the mere establishment of fraud or the provision of incorrect information is not automatically sufficient for a registration. The Kifid has emphasized in numerous rulings that the insurer has an active duty to demonstrate proportionality. If the insurer fails to make clear in the decision-making process how the balancing of interests took place, the registration is usually annulled or significantly shortened. Judges look critically at the ‘human dimension’ here. For example, a registration of eight years can be considered disproportionate for a one-off, minor misstep by someone with no previous incidents, especially when the financial consequences for the person involved are disproportionately severe. The degree of intent is also examined; was there deliberate deception or a careless mistake? It is very important to use this case law effectively when challenging your registration. A specialized lawyer knows exactly which rulings of the Kifid or the judge are relevant to your specific situation and can thereby force the insurer to reconsider or remove the registration.
Step-by-step plan: What to do if the proportionality test is missing or flawed?
If you are confronted with a CIS registration and you suspect that the proportionality test has not been applied, or has been applied incorrectly or insufficiently, it is important to act immediately and decisively. First of all, you must request the complete file from the relevant insurer or bank. Under the GDPR, you have the right to access your personal data and the underlying documents that led to the registration. Check in these documents whether and how the insurer has motivated the balancing of interests. Subsequently, you must submit a formal and legally substantiated request for removal or adjustment of the registration to the management of the financial institution. In this petition, you must set out in detail why the registration is disproportionate, supported by documentary evidence of your personal and financial circumstances. If the insurer rejects your request, the path is open to the Kifid or the civil court. A procedure at the Kifid is often more accessible, but the deadlines are strict. It is crucial not to lose valuable time. For more information about the procedures and your options, please visit our page on the Incident register: how do you get in and what can you do?.
The role of a specialized lawyer in challenging a CIS registration
Challenging a registration in the External Referral Register is a complex legal procedure that requires specific expertise. Insurers have large legal departments and will not simply reverse their decision. A specialized insurance law attorney is an indispensable ally in this.
At Arslan & Arslan Advocaten, we have years of experience in successfully challenging unjustified and disproportionate registrations. We thoroughly analyze your file, assess whether the PIFI has been correctly complied with, and construct an ironclad defense based on current laws and regulations and the most recent case law of the Kifid and the courts. We take the entire communication with the insurer off your hands and, if necessary, conduct the procedure before the judge or the complaints institute. Our goal is to have your registration reversed as quickly as possible, so that you can pick up your life again without the obstacles of a financial blacklist. Do not wait until the problems pile up, but engage expert legal help in time to secure your rights and force the insurer to make a fair and proportionate assessment of your situation.
Frequently Asked Questions
What is a proportionality test for a CIS registration?
The proportionality test is a mandatory legal assessment in which the insurer or bank must assess whether the severe measure of a registration in the incident register is in reasonable proportion to the seriousness of your violation and your personal circumstances.
Can a CIS registration be removed if the proportionality test is missing?
Yes, if the financial institution cannot demonstrate that it has made a careful balancing of interests, the registration is contrary to the PIFI and the GDPR. This is a strong legal ground to successfully challenge the registration and have it removed or shortened.
How long does a registration in the External Referral Register (EVR) last?
An EVR registration lasts a maximum of eight years. However, the duration must also be proportionate. For a minor violation, the maximum term of eight years may not automatically be applied. A lawyer can help challenge a registration duration that is too long.
Read also
- CIS registration: what is it and how do you remove it?
- EVR registration: difference with CIS explained
- Incident register: how do you get in and what can you do?
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