Q&A

Question

With regard to the contract boundaries in a unit-linked product that does not allow regular premiums in which the policyholder assumes the investment risk and has an additional sum assured for the risk of death when projecting future benefits within the calculation of the best estimate of the liability. Should be valued as part of the BEL, the future benefits to the policyholder, the expenses and commissions to the distributor, and therefore the management charges for the pure component of the investment that are charged to customers until the expiry of the policy derived from the in force mathematical provisions at the valuation date?

Background of the question

We are asking this because we consider that in the terms of contract boundaries for a Unit Linked product it should be taken into consideration all the commissions and expenses that this kind of product generates.

EIOPA answer

For the contract described, the obligations within the contract boundary are determined in accordance with Article 18 of the Commission Delegated Regulation (EU) 2015/ 35.

All commissions, expenses and management charges until the expiry of the policy that relate to obligations within the contract boundary should be included in the best estimate calculation.