| Content： |
2.Insurance enterprises shall observe the following basic principles when making information disclosure relating to investment-linked insurance products:
(1)Disclosure of insurance product information shall comply with the Insurance Act, Fair Trade Act, Consumer Protection Act, Financial Consumer Protection Act and other applicable laws and regulations based on the principle of utmost good faith.
(2) Any information or data disclosed must be the most updated and accurate. All representations or charts shall be fairly presented and free of misleading information or concealments.
(3) Terms used in the sales documents shall be expressed in Chinese and use plain language whenever possible, and if necessary, noted with the original language. Terminologies used must be noted with explanations.
(4) Sales documents must have page numbers so consumers can make sure whether there are missing pages and whether they have complete information at hand.
(5)For cautionary language and conditions for principal protection, regular investment income or investment income at maturity provided in the sales documents, their font size shall be at least the same as other parts in the document and the texts shall be
printed in emphasized font style (e.g. bold, italic, underlined, highlighted, contrasting-color fonts or other conspicuous styles).
(6) Sales documents shall not contain wording that refer to income tax free, inheritance tax free, tax savings or other relevant meanings.
The following information shall be conspicuously printed in emphasized font style in sales documents to make sure policyholders understand them fully:
(1) Changes in tax related laws and regulations may affect the return on investment and amount of payment you will receive from this insurance policy.
(2) The values of investment assets recorded under a separate account book for investment-linked insurance products are not protected by the insurance stabilization fund.
8.Detailed description of the insurance plan presented in the product prospectus shall include the following particulars:
(1) Introduction of the investment objects (including name and address of the management company for respective investment object) and reasons for selecting the investment objects. If the insurance contract contains a clause giving the insurance company the
right to increase or decrease the investment objects while the contract is in force, the specific criteria for selecting new investment objects shall be described.
(2) Principles for premium payment (e.g. method for paying minimum premium and premiums on riders), restrictions and consequence of non-payment.
(3) Benefits (e.g. death benefit, disability benefit, survival benefit, and annuity) and payment terms (e.g. terms for annuity payment), and examples of return on investment (ROI) and charts; the examples should describe the basis for expense assumptions. The
description and examples given on ROI shall include the basis for calculating return and observe the following principles:
a. If the investment object has principal protection or is an investment object specified in Article 11, Subparagraph 3 to Subparagraph 5 and provides regular investment income or investment income at maturity: Give examples on reasonable expected ROI and show
the calculation results based on total premium and net investment amount respectively. In case of conditional principal protection, regular investment income or investment income at maturity, describe side-by-side the conditions for principal protection, regular
investment income or investment income at maturity in identical font color and size, and add warnings and reminders at a conspicuous place that cover all material matters having a bearing on the scope of application or validity of the principal protection,
regular investment income or investment income at maturity and the consequence of breach of those conditions.
b. If the investment object is not included in the preceding item: Give examples on four ROIs in reference to the past performance of the investment objects, which however shall not be higher than an annual ROI of 6% (inclusive). If there is the possibility
of investment loss, provide at least one example on negative ROI with relatively higher absolute value for the reference of policyholder (e.g. 6%, 2%, 0%, -6%), and refer to relevant provisions in the Securities Investment Trust and Consulting Association
Guidelines for Advertisements and Business Activities Performed by Members and Their Sales Agents.
(4) If the insurance product carries surrender charges, it should be noted that the examples on policy value given are exclusive of surrender charges that when the policyholder requests for the payment of cash surrender value, they should deduct the surrender
charges from the policy value. In addition, the rate of surrender charge and the amount of surrender charges the policyholder can receive for terminating the contract each year calculated on the basis of the four rates of return (e.g., 6%, 2%, 0, -0.6%) should
be disclosed in examples.
9.The disclosure of investment risk warnings in the product prospectus shall observe the following rules:
(1) The following wordings shall be printed on the inside front cover in a conspicuous manner and using emphasized font style:
a.The past performance of the issuer or manager of all investment objects that the product is linked to is not indicative of future investment income. Unless it is otherwise agreed in the insurance contract, the Company will not be held responsible for investment
gain or loss. The applicant should read this prospectus carefully before purchasing the insurance.
b.If the insurance product has principal protection or is an investment object specified in Article 11, Subparagraph 3 to Subparagraph 5 and provides regular investment income or investment income at maturity, print an additional paragraph stating “You must
hold ○○○○ (name of the investment object) until the regular investment income payment date or maturity before you are entitled to enjoy the income provided by its issuer or guarantor. If the applicant decides to transfer or redeem his/her holding or terminates
the contract early, the applicant is not covered by the income payment and shall assume all associated investment risks and expenses. The applicant should make sure that he/she understands its associated risks and features before selecting this particular
investment.”.
c.If the investment object is not included in the preceding item, print an additional paragraph stating “○○○○ (name of the investment object) does not provide principal protection, regular investment income or investment income at maturity, and the maximum
probable loss is the entire principal of investment. The applicant should make sure that he/she understands its associated risks and features before selecting this particular investment.”
d.If the investment object includes currency related derivatives transactions in accordance with Paragraph 3, Article 10 of the Regulations Governing Investment of Investment-linked Insurance, print an additional paragraph stating "This product involves currency
related derivatives transactions in connection with utilization and management of assets in a separate account undertaken for the purpose of currency hedging by an enterprise that is approved by the competent authorities to engage in or concurrently engage
in discretionary investment service. However such hedging transaction do not guarantee that they are absolutely currency risk free. It is still possible that exchange rate variation may result in losses or decrease the return on investment due to the nature
of hedging instrument, hedge ratio, market movement or other factors."
e.If this product prospectus contains false statement or misrepresentation or conceals material facts, the Company, its responsible officer and other signatories of the prospectus shall be held responsible according to law.
(2) The following important features shall be printed on the first page of the product prospectus:
a.The important features described here are disclosed in accordance with the Compliance Matters for Disclosure of Information on Investment-linked Insurance set out by the competent authority and are to help you understand and decide whether this product is
suitable for your needs.
b. For a fixed-premium investment-linked insurance plan, the product prospectus shall state the following:
(a) This is a long-term insurance policy. If you decide to cancel your policy early, the cash surrender value you may receive is likely to be less than the sum of premiums you have paid.
(b) You should choose this plan only if you are sure long-term insurance is right for you.
(c) You must give careful consideration to all other fees and charges that may incur in the future before deciding the amount of premium you will be able to pay.
c. For a flexible-premium investment-linked insurance plan, the product prospectus shall state the following:
(a) The balance in your policy account is determined by the amount of premiums you have paid and return on investment less policy-related charges, principal and interest on the loan you have taken out, and the amount of benefit cancelled or paid.
(b) Once you decide to cancel your policy early, the cash surrender value you may receive is likely to be less than the sum of premiums you have paid.
d. For a single-premium investment-linked insurance plan, the product prospectus shall state the following:
(a) The balance in your policy account is determined by the amount of premiums you have paid and return on investment less policy-related charges, principal and interest on the loan you have taken out, and the amount of benefit cancelled or paid.
(b) Unless it is unlikely that the cash surrender value will be less than the premiums paid, the prospectus should always state: “Once you decide to cancel your policy early, the cash surrender value you may receive is likely to be less than the sum of premiums
you have paid.”
10.The disclosure of fees and charges in the product prospectus shall observe the following rules:
(1)Fees and charges payable by the applicant to the insurance company should be itemized and tabulated, including front-end loading, policy-related charges, investment-related fees, back-end loading and other charges. In order to help the applicant gain a quick
understanding of all charge items and contents, all charges incurred as described above should be summarized and tabulated (see Table 1 and Table 2 for details), and the calculation and collection methods for the management fee and custodian fee of the NAV
of sub- investment objects in investment objects implemented in accordance with Article 5, Paragraph 1, Subparagraph 2 of the Regulations Governing Investment of Investment-linked Insurance shall also be specified in examples (see Table 3 for details). If
any of those charges is variable, the basis for fee changes and caps shall also be disclosed.
(2)If the front-end loading in the first policy year amounts to more than 50% of the basic (or target) premium, an example of how the charge affects the policy account value should be given.
(3)The insurance company may decide the period for sending a fee change notice to policyholders before the change takes effect, which however shall be not less than three months, unless the change concerns fee reduction that would benefit the policyholders.
(4)For compensation, fees, discounts and other interests received from the counterparty of an underlying structured product, the insurance company should disclose the range of rates charged, and inform the applicant actual rates and annualized rates after collecting
those fees. The caps for the fees shall follow the rules for the investment object or self-regulatory rules.
(5)For compensation, fees, discounts and other interests received from the counterparty of an underlying mutual fund, the insurance company shall inform the applicant before the sale and make disclosure in accordance with Principles and Format of Disclosure
of Channel Remuneration Payments for Fund and Enterprises Entrusted to Engage in Discretionary Investment Service to Utilize and Manage the Assets in the Separate Account by Insurance Enterprises enacted by The Life Insurance Association of the Republic of
China.
(6)For compensation, fees, discounts and other interests received from counterparties of investment objects other than the ones mentioned in the preceding two subparagraphs, the insurance company shall inform the applicants of the range of rates charged before
the sale.
(7)For the investment objects implemented in accordance with Article 5, Paragraph 1, Subparagraph 2 of the Regulations Governing Investment of Investment-linked Insurance with the amount of investment in a single sub-investment object over 1% (inclusive) of
the NAV of the investment object, the insurance company shall show the management fees, custodian fees, distribution fees, and other expenses to be borne by the sub-investment object (see Table 4 for details).
11.The disclosure of investment objects in the product prospectus shall include basic data of respective investment object, allocation percentage, investment targets and associated risks as follows:
(1)Where the investment object is the beneficiary certificates of a securities investment trust fund or the beneficial securities for a mutual fund, the insurance company shall make disclosure in accordance with the requirements for fund disclosure set out
by the competent authority for securities or trust enterprises, and the disclosure shall contain at least the following particulars:
a.Name of fund to invest in, relative percentage of investment under the insurance plan, or the extent by which the applicant may designate or change its allocation percentage.
b.Types of funds (stock fund, bond fund, balanced fund, currency fund, principal-guaranteed fund or fund of funds), and their investment targets.
c.Scheme of fund (open-ended or close-ended).
d.Where the underlying fund invests in foreign areas, note “Invest overseas” and the geographic distribution of the investment areas.
e.Total face value of the fund that has been approved for offering and current asset size of the fund.
f.Profile of fund manager.
g.Risk disclosure (e.g. the risk of over-concentration on certain stock sector, industry cycle risk, risk of inadequate market liquidity, risk of foreign currency control and exchange rate risk, risk associated with political or economic changes in the investment
area, and other investment risks).
h.Performance and beta coefficients of the fund in the past three, two and one years (or since inception); if no beta coefficient is available, provide the risk level.
i.Name of the securities investment trust enterprise or trust enterprise.
j.The disclosure of foreign securities investment trust funds should in addition refer to the particulars to be contained in the investor brochure delivered by the master agent and sub-distributors when offering and selling offshore funds pursuant to the Regulations
Governing Offshore Funds or Sample Investor Brochure on Offshore Funds prepared by the Securities Investment Trust & Consulting Association of R.O.C.
k.Other information.
(2)If the investment object is an exchanged traded fund (ETF), the prospectus shall disclose the underlying index the ETF tracks and the name of exchange on which the ETF is listed in addition to following the provisions in the preceding subparagraph.
(3)If the investment object is a structured product, the prospectus shall contain at least the following particulars. However if the investment object is an offshore structured product, the prospectus only needs to disclose its relative percentage of investment
under the insurance plan, or the extent by which the applicant may designate or change its allocation percentage. The rest of the disclosed items may be substituted by the Chinese product prospectus prepared by the issuer and delivered by the insurance company
to the applicant:
a.Name and rating of the structured product to be invested in, the relative percentage of investment under the insurance plan or the extent by which the applicant may designate or change its allocation percentage.
b.Names and credit ratings of its issuer and guarantor; where the issuer or guarantor is downgraded by any credit rating agency in the future, the insurance company will publicly announce the related fact for the information of policyholders.
c.Issue volume.
d.Underlying assets, e.g. name of index or stock, and their relative weights.
e.Issue date and maturity date.
f.Observation dates.
g.Currency.
h.Cash settlement amount (including minimum redemption amount and participation factors).
i.Name of secondary market or institution giving quote.
j.Investment risks (e.g. credit risk, market risk (including maximum probable loss), legal risk, exchange risk, etc.). The market risk (including maximum probable loss) should be highlighted and presented with figures, and include a phrase: “If you choose to
redeem the structured product before it matures, the amount you recover will be less than your original investment (in the worst case scenario, the amount you recover could be zero), or you may not be able to redeem your investment.”
k.Method of handling when the issuer or the guarantor is unable to fulfill its repayment obligation.
l.Other information.
(4)Where the investment object is a financial debenture or corporate bond, the disclosure shall contain at least the following particulars:
a.Name and rating of the financial debenture or corporate bond to be invested in, the relative percentage of investment under the insurance plan or the extent by which the applicant may designate or change its allocation percentage.
b.Names and credit ratings of its issuer; where the issuer is downgraded by any credit rating agency in the future, the insurance company will publicly announce the related fact for the information of policyholders.
c.Issue date and maturity date.
d.Face value.
e.Coupon rate.
f.Currency.
g.Name of secondary market or institution giving quote.
h.Investment risks (e.g. credit risk, market risk (including maximum probable loss), legal risk, exchange risk, etc.).
i.Method of handling when the issuer is unable to fulfill its repayment obligation.
j.Other information.
(5)Where the investment object is government bonds, treasury notes, savings bonds or bank certificates of deposit, disclosure shall be made according to the disclosure required of financial debentures.
(6)Where the investment object is the beneficial securities of a real estate investment trust (REIT) or real estate asset trust (REAT), the disclosure shall contain at least the following particulars:
a.Name of beneficial securities to be invested in, the relative percentage of investment under the insurance plan or the extent by which the applicant may designate or change its allocation percentage.
b.Duration of the trust deed.
c.Fund scheme (open-ended or close-ended).
d.Total issue amount of beneficial securities.
e.Name or designation of trustor.
f.Names, addresses, and credit ratings of the trustee, real estate management institution and professional appraiser, and their respective obligations and responsibilities.
g.Profile of operation and management personnel.
h.Basic policy, scope, and investment strategy for fund utilization or management and disposal of trust property.
i.Items, schedule, and payment method for income allocation.
j.Matters concerning funds borrowed for handling trust affairs and related expenses.
k.Credit rating of the beneficial securities.
l.Investment risks (e.g. credit risk, market risk (including maximum probable loss), legal risk, exchange risk, etc.).
m. Method of handling in case of non-performance of repayment obligation.
n. Other information.
(7) Where the investment object is asset-backed securities (ABS), the disclosure shall contain at least the following particulars:
a. Name of beneficial securities to be invested in, the relative percentage of investment under the insurance plan or the extent by which the applicant may designate or change its allocation percentage.
b. Duration of the special-purpose trust deed.
c. Total issue amount of beneficial securities.
d. Name and address of originator.
e. Names, addresses, and credit ratings of the trustee and other participating service institutions, and their respective obligations and responsibilities.
f. Profile of operation and management personnel.
g. Variety, name, quantity, amount, average yield, expiry, and trust period of the trust property.
h. Basic policy, scope, and investment strategy for fund utilization or management and disposal of trust property.
i. The method for allocating the principal of trust property and the profits, interest, and other proceeds accrued therefrom.
j. Matters concerning funds borrowed for handling affairs of the special-purpose trust and related expenses.
k. Credit rating of the beneficial securities.
l. Investment risks (e.g. credit risk, market risk (including maximum probable loss), legal risk, exchange risk, etc.).
m. Method of handling in case of non-performance of repayment obligation.
n. Other information.
(8) Where the investment object is mortgage-backed securities (MBS), disclosure shall be made according to the disclosure required of asset-backed securities.
(9) Where the investment object is handled in
a manner provided in Subparagraph 2, Paragraph 1, Article 5 of the Regulations Governing Investment of Investment-linked Insurance, the provisions of Subparagraph (1) hereof apply to the disclosure of the investment object in addition to the following particulars:
a. The educational and professional backgrounds of manager managing the discretionary account, and the status of any disciplinary action received by such person in the preceding two years pursuant to Securities Investment Trust and Consulting Act, Futures
Trading Act, or Securities and Exchange Act.
b. Name of enterprise entrusted to provide discretionary investment service and compensation or fees for the entrusted services.
c. A description of any litigious or non-litigious matters of the enterprise entrusted to provide discretionary investment service resulting from conduct of the business in the past year.
d. Where the investment object offers income allocation, the contents of income allocation, e.g. sources of income, link for inquiring the composition table of sources of income allocation in the past twelve months, allocation plan and adjustment mechanism,
and method of notice for change of adjustment mechanism, and method for paying allocated income, should be described.
e. Where the investment object offers income allocation, the effect of income allocation on the policy value should be described in the examples based on the income allocation plan.
f. Where the investment object offers income allocation, remind the applicants that income allocation may affect, or even lower the value of the investment object, depending on the income allocation plan and income payment method.
g. Where the investment object includes currency related derivatives transactions undertaken for hedging purpose in accordance with Paragraph 3, Article 10 of the Regulations Governing Investment of Investment-linked Insurance, the disclosure shall contain
at least the following particulars:
(a) Types of financial derivatives to be used, currencies to be hedged, hedge ratio and hedge strategies.
(b) The name of financial institution for counterparty of derivatives transactions and its credit rating; if a counterparty is downgraded by a credit rating agency, the insurance enterprise will make announcement of relevant facts and inform policyholders
of the same.
(c) Investment risks (e.g. counterparty credit risk, price risk, legal risk, etc.) and reminder that exchange rate variation may result in losses or decrease the return on investment due to the nature of hedging instrument, hedge ratio, market movement or
other factors.
(d) Ways to handle loss incurred by investors resulting from violation by the enterprise entrusted to provide discretionary investment service in undertaking currency related derivatives transactions for the purpose of currency hedging.
(e) Ways to handle the situation where the counterparty of derivatives transactions is unable to perform debt repayment obligation.
(f) Add the wording "This account can undertake ○○ (currency) exchange rate hedging" behind the name of investment object.
16.An introduction of insurance product shall include at least the following particulars:
(1) Name of insurance product.
(2) Cautionary language in emphasized font style on the first page.
(3) Product No. and date.
(4) Insurance coverage, including benefits and benefit payment, and note “Please read the product prospectus for details on exclusions or exceptions.
(5)Types of investment objects and allocation percentage, conditions for principal protection, regular payment or investment income at maturity (no disclosure is required if there are no allocation percentages for investments or conditions for principal protection,
regular payment or investment income at maturity).
(6) Disclosure of investment risks, including credit risk, market risk (including maximum probable loss), legal risk, exchange risk, etc.; such disclosure is not required if the aforementioned risks do not exist.
(7) With regard to the disclosure of fees and charges, enumerate all fees and charges payable by the applicant to the insurance company, including front-end loading, policy-related charges, investment-related fees, redemption charges, and other charges.
(8) Note “Information on compensation, fees, discounts and other interests to be received from the counterparty of the investment object will be provided to the applicant for reference before the signing of contract.”
(9) Profile of the insurance company, including company name, address, website or email, and toll-free service and complaint hotline.
The introduction of insurance product shall not contain exaggerated or false representations, shall be consistent with the data and information submitted for product approval, and shall not contradict the contents of the product prospectus.
18.Regular reports on policy value shall disclose the following particulars:
(1) Items to be disclosed quarterly:
a. Current status of investment portfolio.
b. Number of units and unit value at the beginning of period.
c. Change in the number of units during the period (including the date of change and unit value at the time of change).
d. Number of units and unit value at the end of period.
e. Amount of premium received in the period.
f. Detailed fees and charges deducted for the period (including sales charges, administration fees, mortality charges and premium on rider).
g. Death benefit and net cash surrender value at the end of period.
h. Principal and interest of policy loan at the end of period.
h. If currency hedging has been undertaken, disclose additionally hedge ratio and the effect of hedging gain/loss on unit value.
(2) Items to be disclosed annually: Aside from disclosing annual summary data on items specified in the preceding paragraph, the annual report shall also include the following items:
a. The financial statements and net ROI on respective investment object related to the insurance plan, investment details on the date of report, detailed fees and charges, changes in investment targets or restrictions, and changes in manager.
b.Where the investment objects are processed in accordance with Article 5, Paragraph 1, Subparagraph 2 of the Regulations Governing Investment of Investment-linked Insurance, the link for inquiring the following items shall be disclosed:
(a) The fee rate of management fee and custodian fee based on the NAV of the investment object and sub-investment object that the amount of investment is over 1% (inclusive) of the NAV of the investment object.
(b) Investment performance (including “asset reversal included” and “asset reversal not included”) in the past three year, two year, and one year and the calculation method.
(c) Composition table of sources of income allocation in the past 12 months.
(3) Method of disclosure: The regular reports shall be delivered in writing or by email as agreed in the insurance contract or as designated by the applicant. However financial statements and net ROI on respective investment object related to the insurance
plan, investment details on the date of report, detailed fees and charges, changes in investment targets or restrictions, and changes in manager to be disclosed annually may be disclosed on the company website and made available in writing upon request.
20-1.Where the investment objects are processed in accordance with Article 5, Paragraph 1, Subparagraph 2 of the Regulations Governing Investment of Investment-linked Insurance, the insurance company shall disclose every month the following items on its website:
(1) Current asset size.
(2) Investment performance (including “asset reversal included” and “asset reversal not included”) in the past three year, two year, and one year. The calculation methods of above-mentioned investment performance are as follows:
a. Asset reversal included investment performance = (net value per unit at the end of above period– net value per unit at the beginning of above period + accumulated amount of asset reversal per unit during above period) / net value per unit at the beginning
of above period.
b. Asset reversal not included investment performance = (net value per unit at the end of above period– net value per unit at the beginning of above period) / net value per unit at the beginning of above period.
21.Insurance enterprises shall include the contents of these Compliance Matters into the operating procedures for their internal control operations in accordance with Subparagraph 14, Paragraph 1, Article 5 of the Regulations Governing the Implementation of
Internal Control and Audit Systems by Insurance Enterprises. |