The Financial Services Authority has put forward five options for improving the way insurance c...
The Financial Services Authority has put forward five options for improving the way insurance companies deal with the attribution or re-attribution of so-called "inherited estates", in an issues paper published today which contributes to its review of with-profits.
One of the five options presented suggests that the FSA take on the role of negotiator, on behalf of policyholders, in addition to its role as regulatory scrutineer, when the company has to decide what to do with its inherited estates or "orphan assets" as they are more commonly known.
Another option, says the issues paper, would beto have an actuary or independent expert placed as negotiator whereby an independent actuary and/or independent expert would be separately appointed with a specific mandate to ensure that the best possible deal, in terms of policyholder benefits, has been obtained in the attribution process.
Alternatively, a proxy negotiator or suitably qualified third party (whether individual, group or organisation) would act as policyholder negotiator by proxy.
Other options recommend policyholders would have to be consulted by the company in an open and public manner to decide how the orphan assets" should be used, or the industry could simply use a modified status quo, which involves the present approach of reports by an appointed/independent actuary or an Independent Expert to decide what happens to the excess funds, along with the ultimate "no objection" scrutiny by the FSA.
Details of each option are contained within the paper which is the first of a series of issues papers to be published under the FSA's review of the With-Profits industry.
Responses should be sent to the FSA by 7 December 2001 in time to conclude its With-Profits Review scheduled for Spring 2002.
Click thru the right-hand link to see this and other FSA discussion/issues papers.
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till