The Financial Market Authority FMA will issue a profit-sharing regulation for life assurances, effective as of January 1, 2007. The publicly discussed misunderstandings in this regard were done away with in a summit meeting between the FMA Executive Board and top-level representatives of the insurance industry. “The talks were very positive and highly constructive,” says Executive Board Member Heinrich Traumüller.
The FMA profit-sharing regulation’s objective will be to provide a clear definition of the assessment basis, traceability of the calculation for the policyholders as well as transparency in case of possible adaptations. The regulation shall only apply to new policies. The FMA, however, has made it clear that in the case of existing policies it will intervene against those providers who have unilaterally changed the profit-sharing modalities to their customers’ disadvantage. “There is zero tolerance from our part for black sheep. They will be called to account,” says Traumüller.
“Basically, it is not the FMA’s policy to interfere with entrepreneurial freedom and thus responsibility,” Traumüller puts it straight once again: “But the policy terms and possible changes have to be transparent, clearly understandable and traceable for the policyholder.” The FMA regulation will thus outline a framework within which the providers will be able to position themselves.
During the talk, the FMA also made clear that it has no objections against “smoothing out” the profit-sharing incomes over time – in order to achieve transfers as constant and continuous as possible – as an insurance-specific feature. However, it insists that the assessment of profits has to be effected within a shorter period of time. “A time delay of up to three years is simply too much,” says Traumüller.
The draft regulation is to be due for review in autumn.
For further information please contact
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-5106
+43/(0676)/882 49 516