11.1 Definitions
In this rule—
"direct marketing"
means the marketing of a policy by or on behalf of an insurer by way of telephone, internet, digital application platform, media insert, direct or electronic mail in a manner which entails the completion or submission of an application, proposal, order, instruction or other contractual information required by the insurer in relation to the entering into of a policy or other transaction in relation to a policy or related services, but excludes the publication of an advertisement;
"policy loan"
includes any loan granted by an insurer under a policy;
[Definition substituted by rule 7(e) of Notice No. 997, GG 41928, dated 28 September 2018]
"significant exclusion or limitation"
means an exclusion or limitation in a policy that may affect the decision of the average targeted policyholder to enter into the policy and includes—
(a) any deferred payment periods;
(b) any exclusion relating to certain diseases or medical conditions;
(c) a waiting period;
(d) any limit on the amount or amounts of cover;
(e) any limit on the period for which benefits will be paid; and
(f) any restrictions on eligibility to claim such as age, residence or employment.
11.2 Application
| 11.2.1 | All requirements in this rule relating to information applicable to a policy apply equally to information applicable to a related service. |
| 11.2.2 | For purposes of this rule, "policyholder" includes a potential policyholder. |
| 11.2.3 | This rule applies to all communications from the date on which this rule takes effect, unless specifically excluded in relation to a specific requirement. |
11.3 General disclosure requirements
Language and format
| 11.3.1 | Any communication by an insurer to a policyholder in relation to a policy must— |
| (c) | be provided using an appropriate medium, taking into account the complexity of the information being provided; |
| (d) | where applicable, be in clear and readable print size, spacing and format; and |
| (e) | in respect of any amount, sum, premium, value, charge, fee, remuneration or monetary obligation mentioned or referred to therein, be stated in actual monetary terms, provided that where any such amount, sum, premium, value, charge, fee, remuneration or monetary obligation is not reasonably pre-determinable, its basis of calculation must be clearly and appropriately described. |
Timing of the provision of information to policyholders
| 11.3.2 | Subject to any specific provision in this rule relating to the timing of the provision of information, an insurer must take reasonable steps to ensure that a policyholder is given appropriate information about a policy in good time so that the policyholder can make an informed decision about the policy prior to inception and throughout the duration of the policy. |
| 11.3.3 | In determining what is "in good time", an insurer must consider the importance of the information to the policyholder's decision-making process and the point at which the information may be most useful. |
Content of the provision of information to policyholders
| 11.3.4 | Information provided must enable a policyholder to understand the features of the policy and help the policyholder understand whether it meets the policyholder's requirements. In determining the level of information to be disclosed the insurer must consider — |
| (a) | the factually established or reasonably assumed knowledge and experience of the policyholder or average targeted policyholder at whom the communication is targeted; |
| (b) | the policy terms and conditions, including its main benefits, exclusions, limitations, conditions and its duration; |
| (c) | the policy's overall complexity, including whether it is entered into together with other goods and services; and |
| (d) | whether the same information has been provided to the policyholder previously and, if so, when. |
| 11.3.5 | An insurer must take particular care to provide adequate information in respect of more complex or bundled features which are likely to be difficult for a policyholder to understand, particularly regarding the costs and risks involved, including defining or explaining terms that could not reasonably be expected to be understood. |
Respective responsibilities of insurers and intermediaries
| 11.3.6 | Where an insurer relies on or permits a representative to provide any information required by this rule to a policyholder or mandates an independent intermediary, binder holder or any other person to do so on its behalf, the insurer remains responsible to ensure that such information is provided in accordance with this rule. |
| 11.3.7 | Where the distribution model concerned is based on an intermediary agreement referred to in rule 12 between the insurer and an independent intermediary, the insurer — |
| (a) | must ensure that the intermediary agreement clarifies the respective responsibilities of the insurer and the intermediary in relation to the provision of information to policyholders, in a manner that will ensure that the requirements in rules 11.3.1 to 11.3.5, 11.4 and 11.5 are met; |
| (b) | must take reasonable steps to ensure that all applicable information required by this rule is in fact provided to the policyholder at the appropriate times; and |
| (c) | must take reasonable steps to mitigate risks to policyholders of the independent intermediary failing to meet its disclosure obligations in terms of the intermediary agreement or any applicable law. |
Identification of the insurer
| 11.3.8 | All information referred to in this rule must clearly and prominently identify the insurer in the same manner as contemplated in rules 10.6 and 10.15.1 to 10.15.3. |
Group schemes and funds
| 11.3.9 | An insurer must, wherever it is reasonably practicable for the insurer to communicate directly with a member in the normal course of business, provide the member with any information that an insurer is required to disclose to a policyholder in accordance with this rule that— |
| (a) | could reasonably be expected to affect the rights or obligations of the member's benefits under the fund or group scheme; and |
| (b) | such member could reasonably require in order to make an informed decision in relation to the member's benefits. |
[Rule 11.3.9 substituted by rule 7(f) of Notice No. 997, GG 41928, dated 28 September 2018]
| 11.3.10 | Where due to the nature of the fund or group scheme it is not reasonably practicable for the insurer to communicate directly with a member in the normal course of business, the insurer must ensure that policies and processes as contemplated in rules 1.6 and 1.7 are in place that— |
| (a) | identify information that must be disclosed to a member in accordance with rule 11.3.9; and |
| (b) | reasonably facilitate and support the provision of such information by the policyholder to the member. |
| 11.3.11 | The insurer must have policies and processes in place to monitor compliance with rule 11.3.10. |
11.4 Disclosure before a policy is entered Into
| 11.4.1 | This rule 11.4 applies in the following circumstances— |
| (a) | where the insurer provides a policyholder or intermediary, before a policy is entered into, with a policy quotation or similar communication that purports to provide detailed information to or for the specific policyholder regarding a specific policy, and it may reasonably be expected that the policyholder will rely on the information to make a decision whether to enter into the policy or not, the quotation or communication must include the information set out in rule 11.4.2; and |
| (b) | where a policy is entered into as a result of direct marketing, the information set out in rule 11.4.2 must be provided by the insurer before the policy is entered into. |
| 11.4.2 | An insurer must provide a policyholder with the following information— |
| (a) | the name of the insurer and its contact details; |
| (b) | the type of policy and a reasonable and appropriate general explanation of the relevant policy; |
| (c) | the nature and extent of policy benefits, including, where applicable, when the insurance cover begins and ends and a description of the risk insured by the policy; |
| (d) | concise details of all of the following, where applicable— |
| (i) | any charges or fees to be levied against the policy or the premium; |
| (ii) | any commission or remuneration payable to any intermediary or binder holder in relation to the policy, and the recipient thereof; and |
| (iii) | any material tax considerations; |
| (e) | in respect of premiums— |
| (i) | the premium that is payable under the policy; |
| (ii) | the frequency at which the premium is payable; |
| (iii) | details of any premium increases, including the frequency and basis thereof; |
| (iv) | whether an increase will be linked to any commensurate increase in policy benefits and any options relating to premium increases that the policyholder may select; |
| (v) | the implications of a failure to pay a premium at the frequency referred to in subparagraph (ii}; and |
| (vi) | in the case of policies where the premium (with or without contractual escalations) is not guaranteed for the full term of the policy but is subject to review after a period as contemplated in rule 15, the period for which the premium is guaranteed, including the frequency at which or the circumstances in which a review will take place; |
| (f) | what cooling-off rights are offered and procedures for the exercise thereof; |
| (g) | concise details of any significant exclusions or limitations, which information must be provided prominently as contemplated in rule 10.15; |
| (h) | where a policy is entered into in connection with other goods or services (a bundled product), the premium payable in respect of the policy separately from any other prices for such other goods and services and whether entering into the policy or any policy benefit is a prerequisite for entering into or being eligible for any other goods or services; |
| (i) | if the policy to be entered into is a credit life insurance policy the insurer must, where this information is known or should reasonably be known to the insurer, disclose to the policyholder whether the policy is a mandatory or optional credit life insurance policy and the difference between the two; |
| (j) | the existence of any circumstance that could give rise to a.n actual or potential conflict of interest in dealing with the policyholder; |
| (k) | any obligation to disclose material facts, including information to ensure that a policyholder knows what must be disclosed as well as the consequences of non-compliance with the obligations; |
| (I) | where applicable, the right to request recordings of any telephonic disclosures; and |
| (m) | the right to complain, including details on how and where to complain and the contact details of the insurer and contact details of the relevant ombud. |
Policies that have an investment value
| 11.4.3 | In addition to rule 11.4.2, an insurer must provide a policyholder with the following information before a policy that has an investment value is entered into— |
| (a) | any guaranteed minimum benefits or other guarantees, where relevant; |
| (b) | any restrictions on access to policy benefits or values or the fact that penalties for early termination or withdrawal from or transfer of the policy apply, which information must be provided prominently as contemplated in rule 10.15; |
| (c) | concise details of all of the following, where applicable— |
| (i) | any charges or fees to be levied against the policy or the premium including, where the policy has an investment component, the net investment amount ultimately invested for the benefit of the policyholder; |
| (ii) | that the policyholder may, where applicable, request details of the past investment performance of the policy. Where such details are requested, they must be provided over periods and at intervals which are reasonable with regard to the type of policy involved; and |
| (iii) | any material investment risk or other risks associated with the policy, which information must be provided prominently as contemplated in rule 10.15. |
| (d) | Where information provided about a policy that has an investment value includes an indication of past, illustrative or future performance, any limits on upside or downside potential and a prominent warning as contemplated in rule 10.15 that past performance is not a reliable indicator of future performance. |
11.5 Disclosure after inception of policy
| 11.5.1 | An insurer must at the earliest reasonable opportunity after inception of the policy, but no later than 31 days after such inception, provide the policyholder with all information referred to in rule 11.4 in writing, to the extent that any such information has not already been provided in writing by the insurer under rule 11.4, as well as the following information— |
| (b) | the timing and manner in which the policy benefits will or may be made available to the policyholder or a beneficiary; |
| (c) | comprehensive details of any restrictions on access to policy benefits and any penalties for early termination or withdrawal from or transfer of the policy, or other implications of such termination, withdrawal or transfer; |
| (d) | comprehensive details of all of the following, where applicable, including the amount and frequency thereof, the recipient thereof, the purpose thereof and the manner of payment— |
| (i) | any charges or fees to be levied against the policy or the premium including, where the policy has an investment component, the net investment amount ultimately invested for the benefit of the policyholder and the anticipated impact of such charges and fees on the policy benefits; |
| (ii) | any commission or remuneration payable to any intermediary or binder holder in relation to the policy; and |
| (iii) | any material tax consideration. |
| (e) | comprehensive details of all exclusions or limitations, including prominent disclosure as contemplated in rule 10.15 of any significant exclusions or limitations; |
| (f) | any obligation to monitor cover, and that the policyholder may need to review and update the cover periodically to ensure it remains adequate; |
| (g) | any right to cancel, including the existence and duration of, and any conditions relating to, the right to cancel; |
| (h) | the right to claim benefits, including conditions under which the policyholder can claim and the contact details for notifying the insurer of a claim; |
| (i) | any requirement to make an election during the duration of the policy, including any default provisions that may apply if such election is not made, as contemplated in rule 5; and |
| (j) | the representations made by or on behalf of the policyholder to the insurer which were regarded by that insurer as material to its assessment of the risks under the policy. |
| 11.5.2 | The information referred to in rule 11.5.1 must be provided to the policyholder in a format which is clearly distinguishable from the policy. |
| 11.5.3 | An insurer, in addition to the information referred to in rule 11.5.1 and 11.5.2, must provide a copy of the policy to the policyholder at the earliest reasonable opportunity after the commencement date of such policy, but not later than 31 days after such commencement. |
| 11.5.4 | Notwithstanding rule 11.5.3, the policyholder, member and the person who entered into the policy, is at any time entitled to be provided, upon request, with a copy of the policy. |
| 11.5.5 | Where any information referred to in rule 11.5.1 has previously been provided in a quotation or similar communication referred to in rule 11.4.1(a), the insurer must confirm whether and to what extent the information remains accurate and applicable in relation to the policy as issued. |
| 11.5.6 | In respect of fund policies, an insurer in addition to the information referred to in rule 11.5.1— |
| (a) | must issue and deliver a fund policy to either the principal officer of the fund, the trustees of the fund or any person managing the fund, at the earliest reasonable opportunity after the commencement date of such policy, but not later than 60 days after such commencement date; |
| (b) | notwithstanding paragraph (a), may, with the approval of the Authority and subject to such conditions as the Authority may determine, postpone the issue, delivery or both of a fund policy. The insurer’s application for approval must be submitted to the Authority in the form determined by the Authority |
[Rule 11.5 substituted by rule 7(g) of Notice No. 997, GG 41928, dated 28 September 2018]
| 11.6.1 | An insurer must in writing disclose to the policyholder information on any contractual changes during the duration of the policy and, on an ongoing basis, disclose to the policyholder relevant information depending on the type of policy. |
Ongoing information on terms and conditions
| 11.6.2 | Information that must be provided on an ongoing basis, and at least annually, includes any changes to information referred to in rules 11.4 and 11.5 to the extent that the policyholder can reasonably be expected to require such information in order to make an informed decision as to whether the policy continues to meet the policyholder's requirements. |
| 11.6.3 | Information that must be provided at least annually in respect of investment policies in addition to the information referred to in rule 11.6.2, includes— |
| (a) | the current value of the investment and the amount of such value which is accessible to the policyholder; |
| (b) | premiums paid to date; and |
| (c) | for linked policies or market related policies— |
| (i) | a summary containing adequate details of the transactions that took place over the relevant period on a policy level, including where applicable the opening value of the investment, premiums received, all charges and taxes deducted, taxes, bonuses, added, dividends and income added, market movements and closing value of the investment fund balance; |
| (ii) | details of the current fund and termination value, including number and value of units per underlying investment fund; and |
| (iii) | confirmation that full details of the investment performance of the policy (including where applicable performance of underlying funds, changes of investments, investment strategy, market movements, and number and value of units and transactions for each underlying fund number and value of the units and movements during the past year, administration fees, taxes, charges and current status of the account of the contract) are available on request. |
Information on changes to terms and conditions
| 11.6.4 | An insurer must provide the following to a policyholder in writing— |
| (a) | notification of any change to the premium and charges payable under a policy; |
[Rule 11.6.4(a) substituted by rule 7(h) of Notice No. 997, GG 41928, dated 28 September 2018]
| (b) | appropriate details of the reasons for any change to the premium payable under a policy, other than where the change is a premium escalation explicitly provided for in the policy; |
| (c) | appropriate details of the reasons for any change to the provisions, terms or conditions of the policy, together with an explanation of the implications of that change; |
| (d) | appropriate details of any change to or addition to the information referred to in rules 11.4 and 11.5 arising from any change referred to in paragraphs (a) to (c); and |
| (e) | an explanation of the policyholder's rights and obligations regarding such changes, including what cooling-off rights are offered and procedures for the exercise thereof. |
| 11.6.5 | The details referred to in rule 11.6.4 must— |
| (a) | where the change to the terms and conditions is effected at the specific request of the policyholder, be provided to the policyholder at the earliest reasonable opportunity but no later than 31 days after the change takes effect; |
[Rule 11.6.5(a) substituted by rule 7(i) of Notice No. 997, GG 41928, dated 28 September 2018]
| (b) | in any case other than as contemplated in paragraph (a), be provided to the policyholder at least 31 days before the change takes effect. |
Information on renewal of policy
| 11.6.6 | An insurer must, at least 31 days before the renewal date of a policy, where applicable, provide the following to a policyholder in writing— |
| (a) | the premium to be paid by the policyholder on renewal of the policy; |
| (b) | the premium last paid by the policyholder under the policy to enable the policyholder to compare the premium to the premium referred to in paragraph (a); |
| (c) | any change to the terms or conditions on renewal of the policy, together with an explanation of the implications of that change; |
| (d) | any change to or addition to the information referred to in rules 11.4 and 11.5 arising from the renewal; |
| (e) | the policyholder's rights and obligations regarding the renewal, including what cooling-off rights are offered and procedures for the exercise thereof; and |
| (f) | a statement indicating that the policyholder should consider whether the level of cover to be offered on the renewal is appropriate for the policyholder's needs. |
Information on policy loans and cessions
| 11.6.7 | An insurer must provide the following to a policyholder in writing— |
| (a) | on entering into a policy loan— |
| (i) | the interest payable on the loan at the time of entering into it; |
| (ii) | whether the interest rate on the loan fluctuates (if applicable); and |
| (iii) | the repayment arrangements of the loan; |
| (b) | quarterly the amount of the policy loan and accrued interest in relation to the value of the policy; |
| (c) | quarterly the interest rate applicable to the policy loan and any changes thereto; |
| (d) | when the loan is about to equal the value of the policy; and |
| (e) | when the benefits under the policy cease as a result of the policy loan equalling the value of the policy. |
| 11.6.8 | On receipt of notification of a cession, an insurer must disclose to a policyholder in writing— |
| (a) | the fact that the cession is recorded in the insurer's records; |
| (b) | whether the cession is an outright cession or a cession securing a debt; |
| (c) | the name of the cessionary; and |
| (d) | how the insurer will deal with any claim for policy benefits in respect of the ceded policy. |
Information on the insurer
| 11.6.9 | An insurer must, in addition to complying with any regulatory obligations, inform policyholders of— |
| (a) | any change in the name of the insurer, its legal form or the address of its head office and any other offices as appropriate; |
| (b) | any acquisition by another person resulting in organisational changes that may affect the policyholder; and |
| (c) | a transfer of insurance business from that insurer to another insurer where the transfer of business relates to such policyholders (including the policyholders' rights in this regard). |
