FSA guidelines for providing unit-linked life insurance policies
The EFSA issued advisory guidelines entitled "Unit-Linked Life Insurance Policies: Components, Underlying Assets and Disclosure to Policyholder". The Management Board of the EFSA approved the guidelines on February 25, 2004.
The objective of these guidelines is to define minimum requirements for unit-linked life insurance policies in order to ensure uniform understanding and provision of this insurance class by insurers. Guidelines set forth minimum information insurers have to provide to customers about the underlying assets associated with unit-linked life insurance policy.
The guidelines stipulates for insurers:
- Two obligatory components of unit-linked life insurance, guaranteed sum insured payable on the death of insured and requirements for the underlying assets associated to unit-linked life insurance policy;
- Minimum requirements to be observed at service provision;
- Minimum requirements to the information disclosed on underlying assets.
For the protection of customers, guidelines provide amongst other things the following requirements:
- Guaranteed sum insured on the death of insured may never be smaller than 102% of the value of underlying assets linked to the relevant policy;
- Restrictions on financial instruments included to underlying assets;
- Insurers are obligated to determine how aware their customers are about the investment field in order to follow the customers' best interest at service provision;
- Insurers have to ensure the availability of information provided with these guidelines for each financial instrument chosen by the customer.
The abovementioned guidelines and EFSA's explanation on the nature of advisory guidelines are posted on the agency's homepage at: www.fi.ee > Legislation > Guidlines of Financial Supervision Authority.
Head of Communication
+ 372 6680 546
livia dot kulm at fi dot ee