The Isle of Man Financial Services Authority (IoMFSA) has confirmed that eight jurisdictions have been given exemptions to providing Key Information Documents (Kids) to clients that would fully disclose all fees and charges directly related to insurance contracts.
The Isle of Man’s Insurance (Conduct of Business) (Long Term Business) Code 2018 has included carve-outs for the United Arab Emirates and Singapore, alongside Argentina, South Africa and Qatar.
It was already known that, where the IoM watchdog recognised that comparable regulation already existed, some jurisdictions would be excluded from some of the disclosure requirements outlined in the code.
South Africa and Singapore were previously flagged for potential exemptions, but no mention had been made of jurisdictions in the Middle East, until now.
The code will come into force from 1 January 2019 but the IoM announced in early November that the Kid and the Summary Information Document (Sid) will only come into effect on 1 July 2019, as reported by International Adviser.
The regulator previously identified products distributed in Hong Kong as exempt from providing Kids if an ‘Important Facts Statement’ and a ‘Key Facts Statement’ have been produced and issued to the policyholder in accordance with requirements from Hong Kong’s Office of the Commissioner of Insurance and Federation of Insurers.
Products sold through an entity regulated by the UK Financial Conduct Authority are also exempt, as are those that fall under the EU’s Priips regulation.
The regulator outlined two types of carve-out – one where a jurisdiction is exempt from paragraphs seven to 10 of the guidance note and the other where it is exempt from paragraphs seven to 14.
This means that business written in Hong Kong, the UK, South Africa and the EU is exempt from the following requirements:
- 7 – Key information documents for long term insurance products with an investment element
- 8 – Mandatory content of a Kid
- 9 – Issue of a Kid
- 10 – Policyholder acknowledgement of a Kid
In addition to the above, Singapore, Argentina, Qatar and the UAE are also exempt from the following paragraphs:
- 11 – Summary information documents (Sid) for long term pure protection insurance products
- 12 – Mandatory content of a Sid
- 13 – Issue of the Sid
- 14 – Policyholder acknowledgement of a Sid
UAE exemption disclosure
In a further twist, licensed and registered brokers in the UAE need to tell policyholders that they are not required to disclose commissions and fees.
Titled ‘Schedule 2’, the IoMFSA document provides a template text for intermediaries to give to clients.
The Isle of Man Financial Services Authority’s Insurance (Conduct of Business) (Long Term Business) Code 2018 requires Isle of Man authorised insurers to put in place measures to ensure the fair treatment of its customers, including providing you with information about this insurance product to help you understand the nature, risks and cost of this product.
As this product is being sold to you through your intermediary in the United Arab Emirates, the insurer is not obliged under local regulations to provide you with the same information.
If you have any questions about the information you have been provided to you in deciding to purchase this product, you should raise them with your adviser. In the event of any issues or concerns, you should raise them with your adviser. In the event of any issues or concerns regarding the sale of the product recourse for the complaint will be to your adviser.