FANews

Getting on top of Employee Benefits legislation

Do you need additional licences to sell employee benefits?
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If you have existing retail business, you will already have a Long-term Insurance subcategory B1 (No 1.3) licence. To sell risk-only employee benefits, you can do so with this same licence. If you want to sell group retirement benefits, you will need a Pension Fund Benefits licence (No 1.7). To sell retirement and insurance benefits combined, you will need both the aforementioned licences. With a Health Services Benefits licence (No 1.16), you can sell health solutions, and for gap cover products, you will need a Short-term Insurance: Personal Lines licence (No 1.2).

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If you have existing retail business, you will already have a Long-term Insurance subcategory B1 (No 1.3) licence. To sell risk-only employee benefits, you can do so with this same licence. If you want to sell group retirement benefits, you will need a Pension Fund Benefits licence (No 1.7). To sell retirement and insurance benefits combined, you will need both the aforementioned licences. With a Health Services Benefits licence (No 1.16), you can sell health solutions, and for gap cover products, you will need a Short-term Insurance: Personal Lines licence (No 1.2).

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Did you know about the new Policyholder Protection Rules prescribed under the Long-term Insurance Act?
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 The new Policyholder Protection Rules (PPRs) put the interests of individual group scheme policyholders and scheme members first. They are designed to ensure fair treatment as embodied in the Treating Customers Fairly (TCF) regulatory framework of the Financial Sector Conduct Authority (FSCA). The new PPRs require group insurers to engage more directly by keeping policyholders informed, and to be able to show fair treatment of all stakeholders at all times.

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The new Policyholder Protection Rules (PPRs) put the interests of individual group scheme policyholders and scheme members first. They are designed to ensure fair treatment as embodied in the Treating Customers Fairly (TCF) regulatory framework of the Financial Sector Conduct Authority (FSCA). The new PPRs require group insurers to engage more directly by keeping policyholders informed, and to be able to show fair treatment of all stakeholders at all times.

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True or false? Insurers may communicate with employees under their employers’ group scheme arrangements and fund members directly.
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Group risk benefits exist for the benefit of employees and fund members. Where communication used to be with the employer or retirement fund (whoever the owner of the policy was), or with one of the insurer's financial advisers or consultants, the insurer now may – and must – communicate directly with individual insured employees and members of the retirement fund.

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Group risk benefits exist for the benefit of employees and fund members. Where communication used to be with the employer or retirement fund (whoever the owner of the policy was), or with one of the insurer's financial advisers or consultants, the insurer now may – and must – communicate directly with individual insured employees and members of the retirement fund.

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Is the insurer allowed to have group scheme members’ personal information?
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To communicate with individual members whenever it is required to do so under the PPRs, the insurer must get at least the names, ID numbers and contact details of every employee or fund member who has benefits under the group scheme from the employer and/or retirement fund.

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To communicate with individual members whenever it is required to do so under the PPRs, the insurer must get at least the names, ID numbers and contact details of every employee or fund member who has benefits under the group scheme from the employer and/or retirement fund.

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Does this mean the insurer no longer has to communicate with the employer or retirement fund?
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The rule that says insurers must now communicate directly with employees or fund members is an additional requirement and does not remove or replace the insurer’s obligation to keep employers and retirement funds informed.

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The rule that says insurers must now communicate directly with employees or fund members is an additional requirement and does not remove or replace the insurer’s obligation to keep employers and retirement funds informed.

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True or false? Ultimate responsibility for complying with the Policyholder Protection Rules lies with the insurer.
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Financial advisers or employers may perform certain functions required by the PPRs and the employers and retirement funds still decide what level of benefits they want to offer their employees and members. However, the insurer has ultimate responsibility to ensure compliance with the PPRs.

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Financial advisers or employers may perform certain functions required by the PPRs and the employers and retirement funds still decide what level of benefits they want to offer their employees and members. However, the insurer has ultimate responsibility to ensure compliance with the PPRs.

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Do the new PPRs provide for better management of claims?
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The new PPRs require insurers to have a framework that sets out all requirements for the management of claims. The framework must ensure efficient payment of claims, fair treatment of claimants, and must remove any barriers that could make claiming difficult.  

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The new PPRs require insurers to have a framework that sets out all requirements for the management of claims. The framework must ensure efficient payment of claims, fair treatment of claimants, and must remove any barriers that could make claiming difficult.  

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Do the new PPRs allow insurers to increase premiums automatically?
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The principle of fairness extends to pricing and premium increases. Insurers may not increase premiums automatically. When increases are due, they have to offer reasonable alternatives first, such as reduced benefits. The PPRs state that any review of a premium payable under a policy must reasonably balance the interests of the insurer and the reasonable benefit expectations of policyholders or members.

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The principle of fairness extends to pricing and premium increases. Insurers may not increase premiums automatically. When increases are due, they have to offer reasonable alternatives first, such as reduced benefits. The PPRs state that any review of a premium payable under a policy must reasonably balance the interests of the insurer and the reasonable benefit expectations of policyholders or members.

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Do the new PPRs say anything about policy terminations?
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Under the new PPRs, insurers who intend to terminate a policy must give the policyholder and the Registrar of Long-term Insurance 31 days’ written notice. If a policyholder terminates or intends to terminate a group scheme policy, the insurer of the policy being terminated must notify the Registrar of the termination or intended termination as soon as possible after becoming aware of the termination or intended termination.

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Under the new PPRs, insurers who intend to terminate a policy must give the policyholder and the Registrar of Long-term Insurance 31 days’ written notice. If a policyholder terminates or intends to terminate a group scheme policy, the insurer of the policy being terminated must notify the Registrar of the termination or intended termination as soon as possible after becoming aware of the termination or intended termination.

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Have you sold employee benefits business before, or do you only sell retail products?
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