• FSA Library
  • Other publications
    • With-profits review

In Spring 2001, we announced we would be reviewing with-profits business. The review would be wide ranging and would involve close consultation with interested parties including consumers, industry and professional bodies.

Stage 1

In Stage 1 of the review, we published five issues papers for consultation. These covered the key themes of the review:

• process for dealing with the attribution of inherited estates;
• regulatory reporting;
• disclosure to consumers;
• discretion and fairness in with-profits policies; and
• governance of with-profits funds and the future role of the appointed actuary.

In May 2002, we published our feedback on the comments received about the various options for change that were set out in these issues papers (Feedback Statement on the With-profits Review). This feedback included our proposals for changes in the regulation of with-profits business and a timetable for the production of consultation papers on our proposals (Stage 2 of the review).

Stage 2

During this stage, we published:

• a consultation paper on 'A new regulatory approach to insurance firms' use of financial engineering' (CP144, July 2002). We published feedback on the responses received in two parts, (PS144, December 2002 and CP195, August 2003);
• a consultation paper on 'With-profits governance, the role of actuaries in life insurers, and certification of insurance returns' (CP167, January 2003). We published feedback on the responses received in a policy statement on 'With-profits governance and the role of actuaries in life insurers'(PS167, July 2003);
• a consultation paper on 'Informing consumers: product disclosure at the point of sale' (CP170, February 2003);
• a discussion paper on 'Issues for with-profits business arising from the Sandler Review'(DP20, February 2003). Feedback on the responses received was included in CP207 (see below);
• a miscellaneous consultation paper (chapter 6 of CP191, July 2003). We published feedback on the responses received in Chapter 4 of Handbook Notice 27(hb_notice27, November 2003);
• a consultation paper on 'Insurance regulatory reporting: changes to the publicly available annual return for insurers' (CP202, September 2003);
• a consultation paper on 'Treating with-profits policyholders fairly' (CP207, December 2003);
• a further consultation paper on treating with-profits policyholders fairly containing some revisions to the proposals in CP207 and feedback on the responses received to CP207 (CP04/14, August 2004);
  
• a report setting out the results of some consumer testing undertaken on consumer-friendly PPFMs (CRPR 31, August 2004); and
• feedback on the responses received to CP04/14 (PS05/1, January 2005); and
• a quarterly consultation paper (CP06/18, October 2006).

With-Profits material in the New Conduct of Business sourcebook (COBS)

The Conduct of Business Sourcebook (COB) contained many of the rules stemming from the With-profits review. In October 2006, we published CP06/19 on reforming COB and introducing a new sourcebook (COBS). Chapter 24 of that paper set out proposals for restructuring the presentation of our with-profits material. COB 6.10 to 6.13 are now located in Chapter 20 of COBS which took effect on 1 November 2007.

We said in PS07/6 that we would move some material on reattribution out of COB 6.13 and onto a new web page.

We have provided questions and answers on the processes and various roles on the process for reattribution of inherited estates - September 2007.

Additionally, we have published these recent letters:

Reattribution of inherited estates [PDF] - April 2008
Clarification of the FSA's framework for reattributions [PDF] - April 2008
Letter of clarification: reattribution of inherited estates [PDF] - December 2007

Press releases
Consultation papers
Issues papers
Responses
Discussion papers
Other relevant documents