COBS 16.6 Communications to clients - life insurance, long term care insurance and income withdrawals 2

1. (1)

   This section applies to a long-term insurer, unless, at the time of application, the client, other than an EEA ECA recipient, was habitually resident:3

   1. (a)

      in an EEA State other than the United Kingdom; or

   2. (b)

      outside the EEA and he was not present in the United Kingdom.

2. (2)

   In addition, COBS 16.6.8 R applies to an operator of a personal pension scheme or stakeholder pension scheme in relation to a retail client who elects to make income withdrawals.

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1. (1)

   The policyholder must be informed if during the term of a life policy entered into on or after 1 July 1994 there is any change in the following information:4

   1. (a)

      the policy conditions;4

   2. (b)

      the name of the insurer, its legal form or the address of its head office and, where appropriate, of the agency or branch which concluded the contract; and4

   3. (c)

      the information in (8) to (13) of COBS 13 Annex 1 (The Solvency II Directive information) in the event of a change in the policy conditions or amendment of the law applicable to the contract.4

2. (2)

   A notification in (1) must be made: 4

   1. (a)

      in a clear and accurate manner and in writing; and4

   2. (b)

      in an official language of the State of commitment or in another language if the policyholder so requests and the law of the State of commitment so permits or the policyholder is free to choose the law applicable.4

If a life policy entered into on or after 1 July 1994 provides for the payment of bonuses and the amounts of bonuses are unspecified, the long-term insurer must, in every calendar year except the first, either:

1. (1)

   notify the policyholder in writing of the amount of any bonus which has become payable under the contract, and which has not previously been notified under this rule; or

2. (2)

   give the policyholder in writing sufficient information to enable him to determine the amount of any such bonus.

4If a firm provides figures, on or after 1 January 2016, about the potential future development of bonuses under a with-profits policy it must inform the policyholder annually in writing of any differences between the actual bonuses payable to date and the figures previously provided.

1. (1)

   When a firm provides information in accordance with this section, it must provide the information in a durable medium, unless (2) applies.

2. (2)

   If the contract is being made by telephone, the firm may give the information orally to the customer. If the customer enters into the contract, a written version of the required information must be sent to the customer within five business days of the contract being entered into.

Where a life policy is effected jointly, the information required by this section may be sent to the first named client.

A firm must make an adequate record of information provided to a customer under this section and retain that record for a minimum period after the information is provided of five years.

1At each anniversary of the date on which a long-term care insurance contract which is based on single premium investment bonds was entered into, the insurer must:

1. (1)

   provide the retail client with a table based on the format of COBS 13 Annex 3 2.2R containing at least the current fund value and projected future policy values (as in column "What you might get back");

2. (2)

   where it is the case, inform the retail client of the possibility that future policy values may be insufficient to fulfil the original purpose of the contract; and

3. (3)

   inform the retail client how to obtain advice on investments in respect of long-term care insurance contracts, and that it is in his best interest to do so.

1At intervals no longer than 12 months from the date a retail client takes a pension commencement lump sum, or makes income withdrawals or one-off, ad-hoc or regular uncrystallised funds pension lump sum payments6, the relevant operator of a personal pension scheme or stakeholder pension scheme 3must:

1. (1)

   provide the retail client with such information as is necessary for3 the retail client to review the decision8, including where relevant the information required by COBS 13 Annex 2 2.9R3; and

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2. (2)

   inform the retail client that if their circumstances or retirement objectives have changed it may be in their best interests to:8

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   1. (a)

      review their choice of pension product; 8

   2. (b)

      review their investment choices; 8

   3. (c)

      take regulated advice to understand their options at retirement; and8

   4. (d)

      seek out guidance. 8