Newsletter
AMENDED REQUIREMENTS BEFORE LAUNCHING INSUR-ANCE PRODUCTS
A new system for the review of insurance poli-cies took effect on 1 September 2006. On 30 August 2006 the Financial Supervisory Com-mission announced amendments to its Regula-tions Governing Requirements before Launching the Insurance Products, and on 1 September it announced the Guidelines for the Review of Non-Life Insurance Products and the Guidelines for the Review of Life Insurance Products. The main points of the amendments to the Regula-tions are outlined below:
Review simplified by negative listing
The review procedure for insurance products distinguishes between products requiring prior approval and those requiring only recordation. "Prior approval" means that an insurer must re-port an intended insurance product to the regu-latory authority and obtain approval before of-fering the product for sale. "Recordation" means that the insurer is not required to obtain prior authorization from the regulator before offering the product for sale, but must file the details of the product with the regulator or a designated agency within 15 working days after commenc-ing product sales.
Time limits for review
For insurance products requiring prior approval, the regulator should review an application and respond to it within 40 working days after re-ceiving the complete application documents, and should render a decision as to approval or rejec-tion within 90 working days.
Incentives for insurers
For insurers that meet certain conditions, specific products normally requiring prior approval may be made subject to recordation instead.
Enhanced consumer protection mechanisms
1.Before an insurance product is presented to the regulator for approval, or before rec-ordation is filed with the regulator, the product should be appraised by the in-surer's product evaluation team. The min-utes of each meeting of the product evaluation team should be presented to the insurer's general manager for review, and should be kept available for inspection by the regulator.
2.In the event of non-compliance with regu-latory requirements by personnel with signing authority with regard to insurance products, the regulator will impose penalty points or suspend their signing authority.
3.Insurers must present details of all their insurance products, and details of changes to products and of withdrawals of products from sale, to the regulator or an entity ap-pointed by the regulator, in the form and manner and at the times prescribed by the regulator or its designated entity, for the purposes of setting up a database of insur-ance products to assist the regulator in its work or for reviewing by the public.
4.Where an insurer needs to make changes to an insurance product in line with changes to relevant legislation, it should make such changes, and notify them to the insurance products database set up by the regulator or its designated entity, within 45 work days after the amended legislation takes effect, except where legislation provides other-wise.