Regulatory Alerts2005-11-10
FMA Circular on Overfunding in Unit-Linked Life Assurance
The Financial Market Authority issued this circular to clarify the regulatory treatment of overfunding in unit-linked life assurance Deckungsstock groups under the Insurance Supervision Act. It establishes that excess assets in investment funds compared to technical provisions are permissible only if they result from necessary advance purchases or accounting settlements and remain limited to the absolute minimum required. The guidance imposes a strict cap where overfunding must not exceed 5% of technical provisions, or €400,000 if provisions are under €8 million, while mandating that underlying investment funds be registered for public distribution in Austria.
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