The final format for the replacement advice record
Rule 19 of the Policyholder Protection Rules (Long-term Insurance)
The FSCA published the final format of the advice record for the replacement of individual risk policies.
Rule 19 of the Policyholder Protection rules( Long-term Insurance), 2017 requires a long-term insurer to obtain a copy of the advice record from an intermediary (or financial advisor) before it enters into an individual risk policy that constitutes a replacement of a policy.
A financial adviser is required to complete the replacement advice record if its client is considering replacing an existing risk policy with a new policy.
The replacement record requires the adviser to complete the following information:
General information of the financial advisor and the policyholder;
Details of the new and replaced policy;
Reasons why the new policy is recommended;
Differences between the new and replaced policy;
General policy features;
Financial advisor remuneration; and
Financial advisors may customize the replacement record by for instance adding its own branding.
Previously the FSCA gave an indication that it will not extend compliance with Rule 19 beyond the 1st of July 2019, but after adhering to requests from long-term insurers and industry associations the FSCA has granted a further extension until the 1st of September 2019.
Long-term insurers and financial advisors should review its current process and implement the use of the new replacement advice record by the 1st of September 2019.
Click here to obtain a copy of the advice record and to read the communication from the FSCA.