The Insurance Supervision Act (ISA) in force since 1 January 2006 replaced the previously applicable preventive product control with tighter solvency control. With respect to life insurance, however, Parliament retained preventive approval of insurance products in the socially sensitive area of occupational pensions.
Life insurance contracts for private and occupational pensions
The new Life Insurance Directive largely corresponds to the existing practice of the supervisory authority. The directive governs life insurance contracts for private pensions of the types 3a and 3b as well as occupational pensions. To improve the transparency of insurance products, the directive further specifies the new provisions set out in the SO. These include rules governing surplus participation, conversion, redemption, and rate schedules.
Enhanced information requirements
The new directive sets out significantly enhanced information requirements for presenting future performance of unit-linked life insurances. By the end of 2010, life insurers must implement this new provision for newly concluded contracts. Moreover, the directive further specifies the information requirements vis-à-vis policyholders with respect to the contractual bases and annual briefings on surplus participation. At the same time, insurers must disclose in detail the amounts payable upon conversion or redemption. The directive thus substantiates the already existing FOPI practice in determining appropriate amounts payable.