Regulatory Alerts2006-12-12
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FMA Circular on Differentiation of Profit Participation in Pension Insurance and Unit-Linked Life Assurance
The Austrian Financial Market Authority issued this circular to prohibit the unequal distribution of profits within pension insurance portfolios, ensuring no insured share is disadvantaged. It mandates that total interest payments remain uniform across comparable contracts unless justified by material reasons such as differing biometric bases. Additionally, the regulator requires unit-linked and index-linked life assurance policies to maintain significant technical risk, including a minimum risk capital of 5% for death benefits.
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