• TAI FSC, TAI Justice amended para. 9 of Directions for disclosure requirements of investment-linked insurance, and para. 8 of Directions for the separate account custodian institutions and investment instruments of the investment-linked insurance.

Disclosure Requirements Highlights

• Specifies the content of disclosure of investment risk warnings of investment-linked insurance products, warnings should be printed in a prominent manner on the cover.
• Specifies the exact wording for the risk disclosure on capital protected products, non-capital protected products, and products involving currency linked derivatives.
• Requires important features should be stated on the first page including that if a client terminates the contract early, the surrender value may be less than the premium paid.

Directions for Custodians Highlights

• Investment-linked insurance products linked to index stock funds traded on domestic or foreign securities exchanges shall be limited to those that invest primarily in stocks and bonds and do not have leverage or short selling, unless provided for in para. 2.
• An insurer that entrusts an approved enterprise to operate discretionary investment business to operate and manage its assets in a separate account may link its assets to an index stock fund with leverage/short selling effects with the following purposes.
• Namely the purpose of hedging, risk management, and conditions re these purposes.

Effectiveness

• The amendments are effective from 18 February 2025.