Regulatory Alerts2012-11-06
FMA Circular 05/2012 Regarding Backdating of Insurance Contracts
The German Federal Financial Supervisory Authority (FMA) issued this circular to clarify its legal interpretation of backdating insurance contracts for supervised undertakings. The regulator deems backdating generally inadmissible as it often circumvents regulations regarding interest rates, age-based premiums, and unisex scales, allowing it only in exceptional cases where legitimate legal or tax interests are documented. Consequently, the FMA requires that actuarial bases set the earliest possible commencement of cover after the sales process begins, limiting permissible backdating to a few weeks to avoid supervisory measures.
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