the principle of continuity required by the principle of equity was generally respected and the companies respected the principles agreed for the distribution of bonuses

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Press release December 9, 2021 – 17/2021

Investigation into compliance with the principle of equity by life insurance companies in 2020: the principle of continuity required by the principle of equity was generally respected and the companies complied with the principles agreed for the distribution of bonuses

According to a survey on compliance with the principle of fairness published by the Financial Supervisory Authority (FIN-FSA), there are wide variations in the principles of premium distribution of life insurance companies. Customer bonuses granted by companies for their savings and retirement contracts have gradually declined over the past thirteen years. Total returns on insurance policies, however, exceeded, on average, both the change in consumer prices and market interest income.

Study results

  • The principle of continuity required by the principle of equity was generally respected and companies complied with the agreed principles for the distribution of bonuses.

  • In accordance with the principle of equity, the companies had taken into account the equity between the various insurance policies of their customers.

  • The information disclosed by companies on the principle of fairness and respect for it was of varying quality, but acceptable to all companies.

  • Information on the allocation of surplus between policyholders and shareholders was not disclosed, so that policyholders could assess the fairness of the allocation of surplus.

The coronavirus pandemic that began in 2020 has disrupted and is expected to continue to disrupt the real economy and therefore also financial markets. FIN-FSA requires insurance companies to factor the risks caused by the protracted COVID-19 pandemic into their operations.

The principle of equity guides the distribution of surpluses

The principle of fairness refers to the way in which companies distribute surpluses between customers, on the one hand, and the company’s customers and shareholders, on the other. The principle of equity also requires respect for the principle of continuity: companies must undertake to maintain the level of bonuses for their customers. The definition of the objectives of the principle of equity is based on the provisions of the Insurance Companies Act.

The FIN-FSA collects insurance statistics on life insurance companies annually and this information is used in the survey on compliance with the principle of fairness. The survey compares bonus distribution targets disclosed by companies on their websites as well as reports on the actual achievement of said targets.

The survey is in Finnish and contains a summary in Swedish.

For more information, please contact

Jari Niittuinperä, Chief Actuary, phone +358 9 183 5517 or jari.niittuinpera (at) fiva.fi

Annexes (in Finnish)

Key words

Life insurance company Fairness principle Continuity principle Investigation Client premium

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FIN-FSA – Financial Supervisory Authority published this content on December 09, 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on 09 December 2021 07:51:03 AM UTC.


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