Insurers back rules on investment linked policies

Local insurers support the Securities and Futures Commission and other government measures to crack down on reckless or negligent sales of insurance products in a bid to enhance investor protection, according to industry players.

1-MIN READ1-MIN

The SFC has published guidance requiring all insurance companies to sign a confirmation form stating internal controls are in place to ensure products are fair to investors, fees are reasonable and the products have proper risk management. Photo: Felix Wong

Published: 1:19am, 22 May 2014

Local insurers support the Securities and Futures Commission and other government measures to crack down on reckless or negligent sales of insurance products in a bid to enhance investor protection, according to industry players.

The Office of the Commissioner of Insurance is consulting with the insurance industry to prepare guidelines to crack down on misleading selling in the insurance sector.

Under the guidelines, insurance sellers would need to consider the age and risk appetite of investors, according to Stuart Fraser, chairman of the Life Insurance Council.

Sales people would be banned from selling 20-year or 30-year-long savings policies to retirees or older people.

"The proposals would improve investor protection and strengthen investors' confidence in investment-linked insurance products," Fraser said, adding the council has issued guidance to improve sales transparency of investment-linked policies.

The South China Morning Post yesterday reported that regulators are set to tighten curbs on the selling of the policies after receiving about 200 complaints from policyholders suffering losses after being lured into buying risky products.