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Changes to regulations affecting Term
Assurance sales
Amendments to FSA regulations
concerning pure protection contracts came into force on 6 June
2007. These amended the definition of pure protection
contracts to remove the restricted age and term conditions.
Previously the rule stated that ICOB products were restricted
where the cessation age went beyond age 70 to terms of 10
years or less. This is known in the industry as the 70:10
rule.
This change allows all long term
insurance contracts that do not have a surrender value to be
sold under the ICOB rules from 6 June 2007.
Products affected by these
changes:
|
Product |
Pre
6 June |
Post
6 June |
|
Level Term
Assurance
Decreasing Term
Assurance
(exceeds
70:10) |
COB |
ICOB or COB* if
adviser has permissions |
|
Level Term
Assurance
Decreasing Term
Assurance (within 70:10) |
ICOB or COB if
adviser has permissions |
ICOB or COB* if
adviser has permissions |
|
Term with
conversion option |
COB |
COB (due to
option to convert to unit linked whole of
life) |
|
Whole of Life
Protection Plan (guaranteed
premium) |
COB |
ICOB or COB* if
adviser has
permissions |
* Advisers will need COB permission
and authorisation in order to sell under COB.
We are pleased to confirm that
Legal & General can accept Term Assurance business which
falls under this change with immediate effect, as updated Key
Features documents are available (please see ‘Literature’
below) and as long as the adviser follows the correct process
and uses the correct literature.
We will be able to accept Whole of Life (guaranteed
premium) contracts under COB using the current available COB
literature. The updated ICOB key features document will be
available shortly (see details below).
Literature
Advisers selling these products
under ICOB will be required to use updated key features
documents (with the key facts logo) which reflect this change.
If selling under COB, existing key features documents can be
used.
The updated documents are accessible below as PDFs and
on the Adviser Centre*:
Technical guides and
product summaries are being updated to reflect these
changes and will be available shortly. We will advise you when
these are available. Advisers can still use the
current versions until updated versions are made
available.
Adviser
centre: will also be updated as soon as
possible.
* These can also
be requested by calling your usual service team or the
Protection Sales Team on 0845 273 0010 who will e-mail you
copies. Lines are open from 9.00am to 5.00pm, Monday to
Friday. Calls may be recorded. Calls charges will
vary.
Applying
Our
paper applications and data capture forms are not affected by
the changes and therefore all existing application forms can
continue to be used.
Online
Protection (OLP) will be updated as soon as possible to enable
term assurance over age 70 with a term of greater than 10
years to be submitted.
You
can continue to submit this business via Term PAC where ‘e’
rates and ‘e’ commission are honoured.
In
this interim period this business can be submitted via paper
applications. In order to support you in this market in the
interim period we are pleased to confirm that we will honour
‘e’ rates and ‘e’ commission for term assurance over age 70
with a term of greater than 10 years submitted by paper
applications.
All
business that can currently be submitted via OLP must continue
to be done through OLP in order to obtain ‘e’ rates and ‘e’
commission.
Convertible
Term Assurance cases should be submitted via paper
applications or via Term PAC to receive 'e' rates and 'e'
commission.
Portals
Assureweb, The Exchange and Webline
already carry warnings advising you not to proceed through the
‘apply’ option when you have quoted for such products. An
example from the Exchange is
provided.
Contact
Us
If
you have any queries on the above, please contact
us. | 
