Following discussions between the Financial Intermediaries Association (FIA) and the Financial Sector Conduct Authority (FSCA), the FSCA have granted exemptions for short-term insurers and long-term insurers providing premium relief, from certain provisions of the Regulations under the Short-term Insurance Act, 1998 and the Long-term Insurance Act, 1998 (the Acts).
Based on the discussions held, the FSCA recognises that the inability to pay premiums as a result of the COVID-19 pandemic will have a negative impact on the income of intermediaries many of whom are small businesses and may be unable to sustain significant income reduction.
From a short-term insurance perspective, the exemption notice is aimed at facilitating, at the discretion of the insurer, the delivery of premium relief to policyholders without impacting the expected income of intermediaries which they receive through commission. The exemption related to short-term insurance includes distinct conditions with which an insurer intending to rely on the exemption must comply. It also provides that where commission is paid in respect of a policy that is subject to premium relief, such commission may still be paid at the discretion of the insurer to assist small businesses and not exceed the maximum allowable commission.
In respect of long-term insurance, the exemption is aimed at facilitating the delivery of premium relief to policyholders by providing for the exemption from immediate adjustment of commission due to a reduction in premium received by the insurer. This exemption is also subject to conditions, which include a requirement that when it comes to the adjustment of commission, in the event that the premium relief remains unpaid for a period longer than 12 months, the adjustment of commission must be effected.
The documents below provide full and further information on the exemptions and the conditions relating to them.