Life offices operating with-profits funds may soon have to provide more detailed information to the FSA about how their funds are run.
In consultation paper 84 called, Interim Prudential Sourcebook: Friendly Societies & Insurance Companies, the FSA outlines six items life offices would be obliged to include in their annual regulatory returns.
These include assets and liabilities attributed to with-profits funds, how assets in with-profits funds are invested, whether non-profits business has been attributed to the fund, the level of free reserves maintained, how smoothing works and how annual and terminal bonuses are calculated. The FSA is also proposing cutting the time life offices have to file their annual returns to from six months to three months.
The move has sparked concern from the ABI, which says because of the limited number of actuaries who specialise in the life insurance industry, it will mean an extra burden and cost to life offices to meet the new deadline. The FSA says the need for timely information has increased because life office liabilities have become more complex and volatile.
Consumers' Association senior policy adviser Mick McAteer says: “This is generally a step in the right direction. It is one of a number of initiatives to improve transparency to policyholders.”