The UK Financial Services Authority has announced that changes to the permitted links rules, which govern the assets that the unit-linked insurance sector can invest in, will come into effect in October. The body said that the changes will allow life insurance companies to invest in a wider range of unit-linked assets.
The new rules reflect changes in recent years in the way that investment markets operate. For example, there are changes to the way that land and property are defined and can be held and a new category of ‘institutional policyholder’ has been created.
The new rules will come into effect on October 6, 2007 and fulfill a commitment in the Financial Services Authority (FSA) business plan for 2006 to 2007 to review the permitted links rules.
Dan Waters, director retail policy and asset management sector leader at the FSA, said: We have taken the opportunity to move away where possible from detailed rules and replace them with a set of more principles-based high level rules. This is a practical expression of how the FSA is moving towards more principles-based regulation and will give the firms affected greater flexibility in investing whilst maintaining an appropriate level of consumer protection.