Regulatory Alerts2006-12-12
FMA Circular on Differentiation of Profit Participation in Pension Insurance and Unit-Linked Life Assurance
The Austrian Financial Market Authority (FMA) issued this circular to enforce equal treatment of insured persons in pension insurance portfolios by prohibiting unjustified differentiation in profit participation. The regulator mandates that total interest payments must generally remain uniform across shares, allowing variations only for specific material reasons such as differing biometric bases rather than contract timing or asset allocation. Additionally, the document establishes technical risk requirements for unit-linked and index-linked life assurance, specifying that death benefits must include risk capital amounting to at least 5% of the life insurance provision.
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