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Regulations Governing Principal Protected Securities Investment Trust Fund Linked Investment Insurance Policy
The FSC stipulated the Regulations Governing Principal Protected Securities Investment Trust Fund Linked Investment Insurance Policy on 12 September 2013. Main points of the Regulations are as follows:
1. Stipulate the required conditions for principal protected securities investment trust fund linked investment insurance policy:
(1) Stipulate the required conditions for fixed-income underlying investment and issuer or guarantee institution of the principal protected securities investment trust fund.
(2) If the principal protected securities investment trust fund deposits money in a time deposit account in a domestic bank for the purpose of operation, the current RBC ratio of the head office of the bank shall comply with the standard specified under the Banking Act.
(3) The term of the principal protected securities investment trust fund shall be at least six (inclusive) years.
(4) The currency denomination of the principal protected securities investment trust fund shall be limited to New Taiwan Dollar, United States Dollar, Great Britain Pound, Australian Dollar, New Zealand Dollar, Hong Kong Dollar, Canadian Dollar, Japanese Yen and Chinese Yuan Renminbi.
(5) The guaranteed rate of return on the principal of the principal protected securities investment trust fund shall be higher than 100% (inclusive) of the denominated currency of the principal.
2. Stipulate the disclosure requirements for the principal protected securities investment trust fund linked investment insurance policy:
(1) Stipulate the disclosure requirements for term sheet of an insurance plan.
(2) Insurance enterprises shall deliver a short form prospectus to the policyholder
(3) Stipulate matters relating to the disclosure requirement for term sheet of an insurance product and notice of important matters.
(4) The compensation, fees, discount and other benefits that an insurance enterprise obtains from the counterparty of the principal protected securities investment trust fund shall be disclosed to the policyholder in bold print in the most recent notice of policy value.
3. Stipulate the sale of principal protected securities investment trust fund linked investment insurance policy:
(1) Insurance enterprises shall comprehensively assess the risk tolerance of policyholders.
(2) Insurance enterprises shall establish a product review unit and its review items.
(3) The required marketing process control of insurance enterprises
(4) Insurance enterprises shall inform policyholders the fund related information in writing within 3 business days after setting up the principal protected securities investment trust fund.
4. The content of these Regulations shall be incorporated into the internal control and internal audit items by insurance enterprises and insurance enterprises shall perform regular audit and special inspection according to the Regulations Governing Insurance Enterprises' Implementation of Internal Control and Auditing System.