Regulatory Alerts2026-07-10
Added · Updated
Interpretation Note on Review Mechanism for Illustration Rate Caps in Benefit Illustration for Participating Policies
The Insurance Authority (IA) has issued this Interpretation Note to establish a structured review mechanism and frequency for the illustration rate caps applied to benefit illustrations for participating policies, supplementing its existing Practice Note. The review mechanism is grounded in three core principles: a formula-based adjustment anchored to prevailing asset allocation and investment outlooks, a smoothing rule to avoid undue volatility, and ongoing market monitoring to maintain competitiveness. Reviews will be conducted biennially, with adjustments implemented only when the calculated difference exceeds fifty basis points and made in increments of fifty basis points, while ad hoc reviews may also occur for significant economic or market developments.