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The regulatory framework for the Unit linked product is being prepared in Russia

The Ministry of Finance of the Russian Federation will rearrange the terms of the future “equity life insurance”, Unit linked. The insurance companies will need a separate license to offer a new product. In addition, a special regulation will be introduced for them, according to the Kommersant newspaper source.
The regulatory framework for the Unit linked product is being prepared in Russia

The meaning of equity insurance is that a person invests money and buys an insurance policy. Part of the funds, usually quite minimal, from its purchase goes to insurance coverage, for example, the risk of death during the period of the policy. The rest is invested in investment fund, which is usually managed by an insurance company.

And according to the selected investment strategies, which can be changed during the validity of the policy, the funds are invested, a return on investment is obtained. This return, however, is not guaranteed. If a person chooses unsuccessful strategies, he may get an investment loss.

Thus, such a product is actually an investment but in an insurance coat, which provides little insurance coverage and allows save on taxes. It is very essential overseas because there are huge taxes on profit and on income of individuals in Europe; it is lucrative for people to invest thanks to tax incentives as well.

The Central Bank sent a letter to insurance companies, the Ministry of Finance and National Association of Securities Market Participants in July with announcement of the intention to launch “equity life insurance” starting from the 4th Q 2022.

Source: https://forinsurer.com/news/21/09/16/40365

Photos are from open sources.

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