The information is provided in the updated Insurance (Conduct of Business) (Long Term Business) Code that was released on 14 November and includes amendments from its final consultation period.
The code outlines the mandatory standard key information document (Kid) requirement that insurers will be obligated to carry out for clients after 1 January 2019.
This requirement will mean insurers on the Isle of Man and their branches around the world will be required to provide bespoke information to clients about exactly how much commission they pay for insurance products.
Disclosure requirements
The code standardises the Kid requirements and includes mandatory information and how it must be presented to clients.
In regards regular premium policies where ongoing remuneration is paid to an intermediary, the code provides a template for disclosing the fees and commission on a Kid.
The disclosure must be in bold text and say: “In addition, after commencement of your policy, the intermediary firm that has advised you will receive ongoing remuneration from [regulated entity name] of [annual value of ongoing remuneration in policy currency] OR [% commission rate, showing up to 3 decimal places, of future premiums paid into your policy] each year for [duration of ongoing remuneration]. The costs of these payments will be met by the charges you pay for your policy”.
Charges and fees on a Kid must be in a tabular format and be shown as a percentage annualised rate or value in the policy currency. It must also be disclosed where the costs will be deducted from.
Further, the code says a Kid must be presented as a stand-alone document, clearly separate from marketing material and it must provide at least a generic description of the underlying investment.
A regulated entity may provide a document that has the contents of a standard KID instead of a SID. The document must include details for notifying a claim.
Delay
The release of the draft code follows an announcement in June 2017 when the IoMFSA removed the transitional requirement for insurers to supply Kid’s.
At the time, the regulator said: “Following a review of responses to the consultation on the Insurance (Conduct of Business) (Long Term Business) Code, the Authority has revised the proposed implementation date of that Code to 1 January 2019”.
