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COBS 20.4 Communications with with-profits policyholders

Provision and publication of PPFM

COBS 20.4.1R

A firm must:

  1. (1)

    on request, provide its PPFM, or the PPFM applicable to specified with-profits funds:

    1. (a)

      free of charge to its with-profits policyholders; or

    2. (b)

      for a reasonable charge to any person who is not its with-profits policyholder; and

  2. (2)

    if the firm publishes its PPFM on its website, prominently signpost its location there.

Notification of changes

COBS 20.4.2R

A firm must send its with-profits policyholders who are affected by any change in its PPFM, written notice, setting out any:

  1. (1)

    proposed changes to the with-profits principles, three months in advance of the effective date; and

  2. (2)

    changes to the with-profits practices, within a reasonable time.

COBS 20.4.3R

A firm need not give the notice required if the change to its PPFM:

  1. (1)

    is necessary to correct an error or omission; or

  2. (2)

    would improve clarity or presentation without materially affecting the PPFM's substance; or

  3. (3)

    is immaterial.

Requirements on EEA insurers

COBS 20.4.4R

In relation to any with-profits policyholder where the state of the commitment is2 the United Kingdom, an EEA insurer must:

2
  1. (1)

    provide the information necessary to enable that policyholder properly to understand the insurer's commitment under the policy;

    2
  2. (2)

    ensure that the information provided is not narrower in scope or less detailed in content than the information required to be provided in the PPFM produced by a firm subject to COBS 20.3;2 and

    2
  3. (3)

    send the policyholder who is affected by any information being changed written notice, setting out:

    1. (a)

      any proposed changes to information that is equivalent to the with-profits principles, three months in advance of the effective date; and

    2. (b)

      any changes to information that is equivalent to the with-profits practices, within a reasonable time.

COBS 20.4.5R

[deleted]3

COBS 20.4.6G

[deleted]3

Annual report to with-profits policyholders

COBS 20.4.7R

A firm must produce an annual report to its with-profits policyholders, which must:

  1. (1)

    state whether, throughout the financial year to which the report relates, the firm believes it has complied with its obligations relating to its PPFM and setting out its reasons for that belief;

  2. (2)

    address all significant relevant issues, including the way in which the firm has:

    1. (a)

      exercised, or failed to exercise, any discretion that it has in the conduct of its with-profits business; and

    2. (b)

      addressed any competing or conflicting rights, interests or expectations of its policyholders (or groups of policyholders) and, if applicable, shareholders (or groups of shareholders), including the competing interests of different classes and generations.

COBS 20.4.8G

The following documents should be annexed to the annual report in this section:

  1. (1)

    the report to with-profits policyholders made by a with-profits actuary in respect of each financial year (see SUP 4.3.16AR(4)); and

  2. (2)

    any statement or report provided by the person or committee who provides the independent judgement under the firm's governance arrangements for its with-profits business.

COBS 20.4.9G

In preparing the annual report to with-profits policyholders, a firm should take advice from a with-profits actuary.

COBS 20.4.10G

A firm should make the annual report available to with-profits policyholders within six months of the end of the financial year to which it relates. A firm should notify its with-profits policyholders in any annual statements how copies of the report can be obtained.