Regulatory and Process Changes Series – Disclosures

Our first two issues of this Regulatory and Process Change Series have related to new requirements when schemes are installed, specifically talking about identifying and communicating material differences and new FICA requirements.

Rule 11 of the Policyholder Protection Rules (PPR’s) relates to disclosures before and during cover though, and it aims to ensure that all relevant information is communicated to policyholders at installation, if there is a benefit structure change and at annual review.

  • Rule 11.5.1 tells us that policyholders need to be made aware of all aspects of the policy at the earliest reasonable opportunity once the policy has been implemented, but no later than 31 days after implementation.
  • Rule 11.6.5 requires the same to happen if a benefit structure change occurs, the result being that policyholders are aware of the changes made and how they may impact them. Again, regulation requires that this happens at the earliest possible opportunity, but no later than 31 days after the change has taken place.
  • A more urgent requirement on disclosure is mentioned in rule 11.6.6 and it relates to the disclosures required at annual review. Regulation now requires that insurers can prove that policyholders have received notification of their annual revision at least 31 days prior to the effective date. This means that the revision needs to take place earlier than it has in the past so that you receive the revision with enough time to deliver it to your client at least a month prior to the review date.

Proof of the client receiving the relevant disclosures needs to be returned to TSA in order for the insurer to be able to meet their regulatory requirement and this can be done by getting the employer to sign the Client Acknowledgement of Receipt form (this will be included in the relevant pack) and returning it to us, or sending an email from the employer confirming that they have received the disclosures. This obviously needs to be returned to us within the above mentioned time frames so that the insurer can provide proof to the Regulator should they be required to.

Please let us know if you have any specific questions relating to this or suggestions on how these new requirements can be handled in the most simple and effective manner.

Thank you and regards,
The TSA Team

Vol 9 Issue 4

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